IndiGo’s five-day operational crisis has caused massive flight cancellations and severe inconvenience for passengers. Simultaneously, the airline’s shares plunged 8.76%, hitting investors hard. DGCA has issued notices to IndiGo’s top management, citing planning and resource management failures.
Five-Day IndiGo Crisis Hits Flights and Share Prices
New Delhi: The IndiGo airline crisis has deeply impacted both passengers and investors over the past five days. Hundreds of flights were canceled due to severe operational problems, causing significant inconvenience to air travelers. The airline has increased the number of canceled and rescheduled flights, but disruptions to operations continue.
The aviation regulator, DGCA, has taken a strong stance on IndiGo's operational issues. The DGCA issued a show-cause notice to IndiGo CEO Pieter Elbers and Accountable Manager Isidro Porqueras, demanding a response within 24 hours. The regulator cited the flight delays and cancellations as a serious lapse in the airline's planning, monitoring, and resource management.
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The IndiGo crisis has not only affected passengers but also investors. Shares of IndiGo's parent company, InterGlobe Aviation Ltd., have been severely impacted. In the last five trading days, the share price has fallen by 8.76%, resulting in a loss of ₹515.50 per share for investors. In contrast, the IndiGo stock had only declined by 5.75% in the last six months and 3.87% in the last month. The decline in share price has reduced the airline company's market capitalization to ₹2.08 lakh crore.
Experts say the biggest reason behind the crisis is the change in pilot flight hour regulations. According to Vijay Gopalan, former CFO of AirAsia, the government increased the pilot rest period from 36 hours to 48 hours per week. This means that the number of hours pilots are available to fly has decreased. Due to an insufficient increase in the number of pilots, the airline was unable to provide the necessary pilots for its operations. This is the main reason for IndiGo's operational problems.
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The IndiGo crisis has also created panic among investors. The sharp decline over the past five days has sent shockwaves through the market. Experts say that if the airline does not quickly resolve the pilot and operational issues, its shares could face further pressure.
The IndiGo crisis has demonstrated that operational disruptions not only cause inconvenience for passengers but can also shake investor confidence. The DGCA's strict action and the airline's corrective measures will be crucial in resolving this crisis.
