Ongoing Indigo Flight Disruptions Led to a Sharp Fall in the Share Price 

Interglobe Aviation Ltd., or Indigo, share price tanked drastically by around 7.5% today until 12.24 p.m. as the aviation giant entered into the 7^th day of its massive operational crisis, leaving thousands of passengers stranded. This nationwide operational crisis of Indigo has led to multiple flight cancellations, disrupting the flight schedules at all major airports. 

IndiGo Share Price Movement 

Today, until 12.30 p.m., the IndiGo share declines around 7.5% to ₹4965.5 per share. This share price decline is continuing even after the airline is trying to make things work smoothly and stabilize operations across the country. In the past five trading sessions, that is, since the beginning of this crisis, the indigo share fell around 14.5%. 

The share price of India’s top airline, Indigo, which has a more than 60% market share, has not only declined in the past five days or today, but it has been decreasing for the past 6 months. It has declined by 12.98% in the past 6 months. 

Massive Disruption Due to Flight Cancellations 

Over 2000 flights have been cancelled in the past 6 days, which has created massive chaos. Passengers have lost their baggage as flights have been even cancelled right before entering the boarding gate. The refunds are delayed for most of the passengers, leaving them helpless. Today early morning, Delhi Airport has issued an advisory asking travelers to thoroughly check the flight status before heading to the airport. 

Having said that, the airline company has already announced a 10% reduction of its current capacity to reset the entire system. On Sunday, they operated around 1650 flights out of the 2300 flights scheduled for the day. It also announced that it has already processed refunds worth ₹610 crore and delivered over 3000 baggage which were delayed. They also waived the change and cancellation fees for the 5 December to 15 December period. 

What led to this IndiGo operational Crisis?

The implementation of the revised Flight Duty Time Limitations (FDTL) norms led to this crisis, as Indigo was operating with a staffing crisis, and as DGCA refused to extend the deadline to implement the FDTL norms, the airline was hit massively due to a lack of pilots and crew. 

IndiGo, being the largest airline by market share in India, got hit the hardest, while Air India, or other airlines, due to their limited number of flights, weren’t affected much. 

On the other hand, the regulatory pressure is building as the DGCA has allowed the CEO of Interglobe Aviation another 24 hours to respond to the show-cause notice, and today by 6 p.m., IndiGo’s CEO Pieter Elbers needs to respond. 

Wrapping up 

As the market awaits the CEO’s response, the Indigo share price continues to dive. It will be interesting to see how the market reacts to the long-awaited CEO’s comments and how the Indigo shares further perform today and in the upcoming days until this crisis ends. 

Source: https://www.moneycontrol.com

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