New Delhi: Raisina Hill is not taking IndiGo's operational meltdown lightly and will take exemplary action if it determines there has been non-compliance, the Union civil aviation minister said in parliament on Monday (December 8) as the airline marked a seventh day of flight cancellations and a sustained fall in share value.

Meanwhile, its CEO is due Monday evening to respond to the Directorate General of Civil Aviation (DGCA)'s notice asking him to show cause for why it should not take action against his ‘failure’ to ensure reliable operations as well as charging the airline with prima facie non-compliance with rules.

Answering a question in the Rajya Sabha about the reason behind IndiGo's debacle – leaving thousands of passengers stranded as the market leader cancelled flights en masse – civil aviation minister Ram Mohan Naidu said it was caused by disorder in the airline's internal rostering system amid the rollout of new pilot rest and duty rules.

Ministry officials met IndiGo management on December 1 – a day before the crisis began – but the airline did not flag the issue, he said.

“We are not taking this situation easily. We are doing an inquiry and we will take very, very strict action, not only for this situation, but also as an example. We will set an example for all the airlines if there is any miscompliance” by any entity, said Naidu, who also denied that the government had ‘compromised’ on checking compliance with the modified rules.

IndiGo shares declined by 8% on Monday and its total stock losses since the start of the crisis amounted to 16%, shaving off $4 billion from its market capitalisation, Reuters reported on Monday.

Having cancelled over 2,000 flights since Tuesday last week, IndiGo cancelled an additional 127 flights in Bengaluru and 32 in Mumbai on Monday, the news agency reported citing airport sources. The airline's website listed 224 cancelled flights on Monday as of early afternoon, although it is not known how many of these are linked to the ongoing problem.

It has been reported that the crisis stems from IndiGo's failure to prepare its rosters for the rollout of the new rules last month – which among other things increased the weekly rest time for pilots, limited the number of landings they can make between midnight and early morning, and capped the amount of time for which they could fly late into the night.

They had gone into effect last month but the disruption in IndiGo's operations began only last week as December sees a peak in travel for holidays and weddings in India, noted Reuters.

The government relaxed a number of these new rules – some for IndiGo and some for all airlines – except the increase in weekly rest time in response to the situation that resulted in en masse flight cancellations. The move has drawn criticism from pilot bodies.

However, the DGCA on Saturday noted IndiGo's “non-provisioning of adequate arrangements” in response to the rules, charging it with apparent “significant lapses in planning, oversight and resource management” as well as “prima facie non-compliance” with the new provisions.

CEO Pieter Elbers is responsible for ensuring effective management but he has “failed in [his] duty to ensure timely arrangements for conduct of reliable operations and the availability of requisite facilities to the passengers”, the regulator said in its show cause notice giving the executive 24 hours to respond.

After IndiGo requested additional time in light of its predicament the DGCA reportedly granted it another day, i.e. until 6 pm on Monday to respond.

IndiGo also acknowledged to the DGCA that its planning ahead of the rules was “insufficient”, the Business Standard reported, adding that the airline could face its harshest regulatory penalties to date if the regulator determines that it wilfully did not comply with the new provisions.

As of Sunday evening, IndiGo – which said it hoped to return to normal conditions by Wednesday, December 10 – ‘showed steady improvement’ in its performance and seemed set to operate 1,650 flights that day as opposed to 706 on Friday, the civil aviation ministry said.

The airline disbursed refunds worth Rs 610 crore and delivered 3,000 units of luggage to passengers countrywide, it added.

The fiasco and the resulting hardship caused to passengers has also drawn attention to IndiGo's large market share of nearly 66% in the Indian passenger airline sector.

When combined with Air India's 27% share of the pie, what emerges is a ‘duopoly-like situation’, while in countries like America and China even two or three of their largest airlines taken together do not have market shares as large as IndiGo's, it has been noted.

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