Pradeep S. Mehta | The IndiGo Mess And The Misplaced Narrative Over Competition Law
The more serious question, however, is how the regulator allowed this situation to escalate. The transition was foreseeable, the risks were evident, yet enforcement remained weak until disruptions became alarming
Flight cancellations, capacity shortages and abnormally high surge in airfares have once again brought India’s aviation sector under scrutiny, with IndiGo at the centre of the debate.
Having scrapped nearly a quarter of its 17,000-plus domestic flights in the first week of December, the situation has triggered renewed calls for competition law action against IndiGo.
However, framing this episode as a competition law issue is conceptually flawed. What transpired was not an abuse of dominance under the Competition Act 2002, but a failure of regulatory compliance and, more fundamentally, a breakdown in competition policy implementation. Treating every market disruption as an antitrust problem risks diluting competition law and obscuring deeper institutional shortcomings.
The immediate trigger was IndiGo’s non-compliance with the DGCA’s revised Flight Duty Time Limitation (FDTL) norms, introduced nearly two years ago to align Indian aviation safety standards with global benchmarks and address persistent pilot fatigue. These rules, which increased weekly rest from 36 to 48 hours and reduced permissible night landings from six to two, were backed by a phased implementation timeline with clear deadlines in June and November. While some carriers, including Air India, indicated compliance, IndiGo admitted it could not fully implement the norms in time reflecting its ability, by virtue of scale and market position, to operate relatively independently of competitors. IndiGo apparently had a shortage of pilots and was therefore making the existing pilots work overtime.
The more serious question, however, is how the regulator allowed this situation to escalate. The transition was foreseeable, the risks were evident, yet enforcement remained weak until disruptions became alarming. This concern was also echoed by the Delhi high court, where a bench comprising Justices Devendra Kumar Upadhyaya and Tushar Rao Gedela questioned the regulator’s role, noting that the authorities appeared to let the situation precipitate before acting. Beyond operational chaos, such regulatory lapses impose real economic costs disrupting travel, business activity and consumer confidence, which show that delayed enforcement does not merely inconvenience passengers, but also has wider economic implications.
Much public outrage focused on “opportunistic” or “surge” pricing. However, such pricing is not inherently anti-competitive. Competition law does not prohibit firms from responding to demand-supply imbalances by adjusting prices, even sharply. Opportunistic pricing becomes problematic only when it is enabled or sustained by exclusionary conduct or market foreclosure. In this case, the price hike was a market response to a regulatory-induced supply disruption, not an exercise of market power independent of competitive forces.
Treating surge pricing, by itself, as evidence of abuse would stretch the scope of Section 4 of the Competition Act beyond doctrinal limits.
Indeed, Section 4 targets conduct that is exploitative or exclusionary such as denial of market access, imposition of unfair conditions, or price manipulation decoupled from market fundamentals. IndiGo’s conduct does not fall within this framework. There is no evidence that it used its dominance to foreclose competitors or to impose unfair pricing unrelated to supply constraints. Non-compliance with safety or sectoral labour regulations, while serious, does not automatically translate into abuse of dominance.
Equally important is the labour dimension of the crisis. One argument advanced is that IndiGo could have hired foreign pilots to cope with the shortage of pilots. This was existing in practice by now defunct airlines like Jet Airways and Kingfisher. Hiring Indian pilots is constrained by structural labour market rigidities. Pilots in India typically operate under notice periods ranging from six to twelve months, which is an unusually long duration that significantly hampers workforce mobility and timely capacity adjustments. Such restrictions are not conducive to a competitive environment and merit reassessment. However, these are labour and sectoral policy issues, not competition law violations, though there is currently some talk globally on labour conditions and competition law. Currently, the responsibility for addressing such constraints lies primarily with the sectoral regulator, DGCA.
That said, the episode raises serious competition policy concerns. Competition policy operates at a broader level, focusing on how regulatory design, enforcement consistency and institutional coordination affect competitive outcomes. Here, the failure lies in delayed enforcement and regulatory retreat. The FDTL norms were foreseeable and announced well in advance. IndiGo’s claim that the disruption was “unforeseeable” is difficult to accept.
Instead, as the disruptions worsened, IndiGo was granted a one-time exemption until February, which was then followed by a broader postponement of the norms until February 2026. Rolling back safety-focused regulations in response to market instability weakens regulatory credibility and creates clear moral hazard, especially in an industry where fatigue can have serious, even fatal consequences. It also sends a troubling signal that size can soften accountability, a message that ultimately harms both competition and safety.
This is where competition policy, rather than competition law, must intervene. Competition policy works upstream: it shapes the structure of the market, not punishing firms after the effect. If a single airline’s compliance failure can disrupt the entire sector, it points to deeper policy weaknesses: high entry and expansion barriers, rigid labour rules and limited avenues for new or smaller players to scale up quickly. By easing regulatory and technical barriers, encouraging broader participation and making the market less dependent on a few large incumbents, competition policy can improve resilience without diluting safety standards.
Equally important is that sectoral regulators actively monitor the market to ensure these weaknesses do not lead to broader system-wide failures.
The IndiGo episode is a stark reminder that market dominance and weak regulatory enforcement can create chaos far beyond a single company. Policymakers and regulators must strengthen both competition policy and competition law enforcement to ensure markets are resilient, fair and accountable. Ignoring these risks and allowing a firm’s scale to excuse its failures comes at a real cost to consumers, competitors and overall safety.
Pradeep S. Mehta is the secretary-general of CUTS International, a 42-year-old leading global public policy research and advocacy group.
