IndiGo’s ‘paan shop’ warning comes true: How Rakesh Gangwal’s exit left India’s top airline vulnerable

New Delhi: A week ago, no one would have believed that IndiGo, the airline once synonymous with punctuality and precision, would be branded as unreliable. But since December 2, India’s largest carrier has been in chaos, leaving thousands stranded across airports. Over 1,000 flights were cancelled in just three days, with passengers sleeping on terminal floors, paying lakhs for last-minute tickets and struggling in distressing situations—from women without sanitary pads to families unable to transport loved ones’ bodies. The crisis has exposed deep cracks in IndiGo’s management—the same company once hailed as a model of efficiency and profitability.

IndiGo’s rise to dominance was the result of the partnership between Rahul Bhatia and Rakesh Gangwal, two visionaries who turned a modest startup into India’s only consistently profitable airline. But after their fallout, the airline’s direction changed. When Gangwal famously called IndiGo a "paan shop” six years ago, many dismissed it as frustration. Now, his words seem prophetic. He had long warned that governance failures and operational shortcuts could one day bring the company down.

In May 2025, Gangwal finally sold his remaining stake—worth Rs 30,000 crore—and cut ties completely. His departure was the end of an era. Industry insiders say he left because the airline’s methodology and management style no longer reflected the discipline he believed in.

Gangwal and his family once owned 37 per cent of IndiGo. But in 2019, he wrote to SEBI alleging serious governance lapses, saying even a "paan shop could be run better.” He accused co-founder Bhatia of having disproportionate control through related-party transactions and warned that failure to reform would lead to "unfortunate consequences.” In hindsight, his warnings appear eerily accurate.

When Bhatia founded InterGlobe in 2004, IndiGo couldn’t buy aircraft for two years. It was Gangwal’s deep aviation experience that changed the game. He negotiated a 100-aircraft lease deal with Airbus, allowing IndiGo to start operations in 2006. His obsession with punctuality earned IndiGo its "on-time, every-time” reputation. He introduced military-style discipline in operations and kept costs low through bulk aircraft orders and efficient fleet use.

Under him, IndiGo built a fleet of over 400 planes and became a global low-cost model. His strategy of combining expat expertise with Indian management helped build one of the most efficient airline systems in Asia. Even after his exit, his operational blueprint guided IndiGo—until it didn’t.

Today, as the airline struggles to recover from its worst crisis, many within the industry believe Rahul Bhatia might finally agree with what Gangwal warned years ago: that without discipline and integrity, even a giant can run like a paan shop.