Shares of InterGlobe Aviation Ltd. fell the most in eight months after India’s civil aviation regulator called on the chief executive to explain the flight cancellations that have roiled India’s largest airline.
IndiGo’s share price fell as much as 7.56% to ₹4965.05 apiece on the BSE, even as the benchmark Sensex traded up to 0.40% lower. According to a HT.com report, IndiGo has reported more than 400 flight cancellations so far on Monday versus over 1,000 on Friday.
“The regulatory action including a show-cause notice to the CEO (possible management change) is likely to further dampen stock performance besides possible impending one-time penalty,” JM Financial Ltd. analysts Ashutosh Somani, Anirudh Nagpal and Anuj Khandelwal wrote in a 7 December note.
“Near-term, we estimate earnings hit of 8-9% for FY26 if the situation lasts for a total of ~15 days with five days already done (not including the penalty amount).”
IndiGo Flight Cancellations
Mass cancellations by IndiGo, which has nearly 66% domestic market share, left thousands of passengers stranded last week across major Indian airports. In a statement on Sunday, the airline said it’s on track to operate more than 1,650 flights, with on-time performance improving to 75% and was expecting operations to normalise by 10 December.
The carrier, which runs a “lean, high-utilisation model”, has been hit hardest by new pilot rules that bar airlines from substituting weekly rest with leave, according to a note by Jefferies analysts including Prateek Kumar. IndiGo is facing rising costs from flight cancellations, compounded by pressures from a weaker rupee and higher crew expenses, the brokerage said.
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The disruption, which started late Tuesday night last week, stemmed largely from the pilot shortage due to new rules that extended mandatory rest periods and reduced the number of permitted night landings. Those rules have been put in abeyance by the government to help the airline stabilise.
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