India's Directorate General of Civil Aviation (DGCA) on Tuesday told IndiGo it had one day to submit an updated flight schedule, including a 5% cut in departures, after the airline stranded tens of thousands of passengers by canceling over 2,000 flights this month.

What does the regulator's order mean for IndiGo?

• India's largest national carrier is required to cut about 115 flights per day
• The airline had already canceled over 330 flights on Tuesday
• IndiGo has apologized to passengers and said it would refund tickets for grounded passengers
• The cuts come as demand for winter travel begins to pick up in India

Authorities said IndiGo, which controls more than 60% of India's domestic market, failed in its operational planning after a 6% expansion over its summer flight schedule.

"The airline has not demonstrated the ability to operate these programs efficiently," DGCA said. "Therefore, it is ordered to reduce the program by 5% in all sectors."

DGCA told the airline to reduce flights on routes also operated by rival airlines and maintain service where IndiGo maintains a monopoly.

Government to encourage airline competition

Civil Aviation Minister Ram Mohan Naidu told members of parliament that safety in air travel would remain "non-negotiable" and that "no airline will be permitted to cause such hardship to passengers through planning failures and non-compliance with statutory provisions."

"The disruption caused by IndiGo's operational failures is now rapidly stabilizing," he added. "All other airlines continue to operate smoothly across the country."

Naidu also said the government would encourage "more new airlines to start and operate in India."

Over 330 IndiGo flights were canceled on Tuesday, down from 560 a day before. The company said later on Tuesday that operations had stabilized. 

"Our on-time performance is... back to normal levels," an IndiGo statement said, adding the airline was operating more than 1,800 flights on Tuesday and planned to "fly nearly 1,900 flights" on Wednesday.

IndiGo's on-time performance — which stood at a strong 84% in October — plummeted to as low as 35% during the peak of the crisis.

"I, on behalf of IndiGo, would like to extend our sincerest apologies for the major inconvenience this has caused to many of our customers," IndiGo CEO Pieter Elbers said Friday.

IndiGo, which controls about 65% of India's domestic aviation market, said it failed to plan sufficiently for new night flight and weekly pilot rest rules that went into effect on November 1.

Social media posts showed security-tagged bags piled up in terminal areas in New Delhi, Mumbai and Bengaluru airports with many furious passengers seeking help from IndiGo's social media team on X. "Delhi Left Holding The Bag," read one headline of a Times of India newspaper photo showing hundreds of bags in a passenger seating area.

IndiGo shares fell 0.22% on Tuesday and have lost nearly 17.1% of their value since the beginning of the month.

Edited by: Louis Oelofse