InterGlobe Aviation , India's largest airline operating under the IndiGo brand, is experiencing mixed market conditions as recent air traffic data shows a concerning trend despite the carrier's strong 2025 performance. The airline faces recovery challenges with air traffic failing to recover and declining 5% in the last 10 days, creating investor uncertainty about near-term prospects.

Recent Traffic Decline Amid Strong Annual Performance

While IndiGo achieved record performance in 2025, recent operational data indicates headwinds in air traffic recovery. The airline's traffic metrics show a notable decline over the past 10 days, highlighting the volatile nature of the aviation sector.

Despite the recent traffic challenges, IndiGo's 2025 performance remained robust, carrying 123 million passengers compared to 113 million in 2024, representing an 8.85% year-over-year growth.

International Expansion Continues Despite Headwinds

IndiGo's international growth strategy remains on track with significant expansion plans for 2026. The airline is preparing for its Athens service launch on January 23, 2026, marking the international debut of India's first Airbus A321XLR aircraft.

The airline added 10 new international destinations in 2025, including routes to Seychelles, Krabi, Madinah, Fujairah, and Siem Reap, while also restarting China routes from Kolkata and Delhi.

Fleet Modernization and Network Expansion

IndiGo has significantly expanded its operational capabilities despite current traffic challenges. The airline doubled its order for Airbus A350-900 wide-body aircraft to 60 units and expanded its dual-class IndiGoStretch cabins across 42 aircraft.

Domestically, the airline strengthened connectivity by launching operations at Navi Mumbai, Purnea, and Rewa, while adding routes to Hindon, Adampur, Kishangarh, and Bikaner.

Market Position and Future Outlook

Despite recent traffic recovery challenges, IndiGo maintained its market leadership position with industry-leading on-time performance for 10 out of 12 months in 2025. The airline transported over 55,000 tonnes of cargo and generated more than USD 10 billion in annual revenue.

The carrier was recognized as Best Airline in India and South Asia at the Skytrax World Airline Awards, continuing to rank among the top 20 airlines globally. With the upcoming A321XLR induction and ongoing international expansion, IndiGo remains positioned for long-term growth despite short-term traffic volatility.

The Directorate General of Civil Aviation (DGCA) has issued a show-cause notice to Air India cockpit crew for operating multiple flights between Delhi and Tokyo despite being aware of serious safety and compliance lapses. The aviation regulator has sought an explanation from the pilots within two weeks regarding their operational decisions and compliance protocols.

The notice, issued on December 29, specifically targets the cockpit crew for operating flights despite knowledge of repetitive technical snags and existing system degradations. This regulatory action raises significant questions about the airline's safety protocols and flight crew decision-making processes.

Regulatory Action Details

The DGCA notice pertains to several operations of flight AI-357 from Delhi to Tokyo and AI-358 from Tokyo to Delhi, along with previous concerns about flights AI-258 and AI-357. The regulator has highlighted that the Minimum Equipment List (MEL) applicable to the aircraft was incompatible, creating serious safety compliance issues.

Safety Compliance Violations

The show-cause notice emphasizes non-compliance with the Minimum Equipment List for flights operated, including a specific violation on June 28. According to the DGCA, this was not an isolated incident, with similar issues detected on other sectors in the past. The regulator has determined that aircraft were operated despite prior knowledge of repeated snags and MEL incompatibility.

The DGCA has specifically flagged safety concerns related to three critical areas: aircraft dispatch procedures, MEL compliance standards, and flight crew decision-making during operations. These concerns indicate potential systemic issues in Air India's operational oversight and pilot protocols.

Legal Implications

The DGCA has asked the pilots to explain why action should not be initiated against them under the Aircraft Rules and Civil Aviation Requirements (CAR). This escalation suggests the regulator views the violations as serious breaches of aviation safety standards that could warrant disciplinary action against the flight crew.

The aviation watchdog's intervention highlights the seriousness of operating aircraft with known technical issues, particularly on international routes where passenger safety and regulatory compliance are paramount. The focus on individual pilot accountability marks a significant step in the regulatory response.

Current Status

Air India has not provided any comment regarding the show-cause notice or the specific allegations raised against its cockpit crew. The current operational status of the affected flights and aircraft VT-ANI remains unclear, with no immediate confirmation whether operations have been modified pending resolution of the regulatory concerns.

The DGCA's action underscores the regulator's commitment to maintaining aviation safety standards and ensuring both airlines and individual crew members comply with established operational protocols, particularly regarding aircraft with known technical deficiencies.