IndiGo Loses DGCA Appeal, ₹40 Lakh Penalty Confirmed, Shares Dip

TRANSPORTATION

Overview

IndiGo's appeal against a ₹40 lakh penalty on two senior executives for pilot training lapses has been rejected by the DGCA Appellate Authority. The regulator cited failure to use qualified simulators. The airline's shares fell 1.2% on the BSE following the announcement.

Regulatory Setback for IndiGo

IndiGo, India's largest airline, has lost its appeal against penalties imposed by the Directorate General of Civil Aviation (DGCA). The aviation regulator had fined two senior executives ₹20 lakh each for alleged lapses in pilot training procedures. The DGCA Appellate Authority dismissed the airline's appeal through an order issued on January 7.

Penalty Details and Regulator's Stance

The penalties were initially levied in September last year. The DGCA cited IndiGo's alleged failure to utilize qualified simulators for pilot training at Category C aerodromes. These airports present unique operational challenges, necessitating rigorous pilot training and qualification. IndiGo had contested the initial order, seeking recourse from the appellate authority. The airline confirmed the appellate authority's decision to reinstate the penalties on its Director of Flight Operations and Director of Training in a filing to the BSE.

Market Reaction and Context

Following the disclosure of the failed appeal on Friday, shares of IndiGo saw a decline. The stock price fell 1.2% to close at ₹4,844.70 on the Bombay Stock Exchange. This regulatory setback occurs as the Indian aviation sector experiences increased competition, with the civil aviation ministry recently granting initial approvals to two new airlines. IndiGo currently holds a dominant market share of approximately 65%.

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