The morning of Monday, December 8 was a bit heavy for the investors of InterGlobe Aviation, the parent company of Indigo Airlines. As soon as the market opened, there was a lot of pressure in the shares of the company and this stock fell by about 7% on BSE to reach an intraday low of Rs 5,015. The market cap of the company was Rs 2,07,649.40 crore on Friday, which increased to Rs 1,93,875.18 crore in the morning trade on Monday. Meanwhile, the company has suffered a loss of Rs 13,774.22 crore. This decline came to light when aviation regulator DGCA extended the deadline given to IndiGo CEO Peter Elbers to respond to the show cause notice by one day.
DGCA keeps a close watch, big question on accountability
DGCA has asked tough questions to IndiGo regarding the recent massive flight disruptions affecting thousands of passengers across the country. The regulator had sent a notice to CEO Peter Elbers asking why the airline had failed to prevent such a huge mess. The biggest shock came on the day when IndiGo canceled more than 1,000 flights in a single day, the highest number of daily cancellations by any airline in the history of Indian aviation. According to DGCA, this entire crisis arose due to the failure to properly implement the changed Flight Duty Time Limitation (FDTL) rules for pilots.
The new rules included things like increasing the time of night duty, reducing the number of night landings and giving more rest to the pilots. DGCA says that IndiGo could not prepare properly for these changes, due to which there was chaos in the entire network.
Regulator’s warning – no more relief than the deadline
DGCA had asked CEO Albers to reply within 24 hours, which has now been extended by one more day. But the warning is also clear that no further extension will be given after 6 pm on Monday. If the airline does not respond within the stipulated time, DGCA can also take unilateral action. A separate notice has also been sent to the accountable manager of the airline, which clearly shows that the regulator is taking this entire incident very seriously.
Efforts to get flights back on track intensified
On the other hand, IndiGo claims that the situation is improving and its flight network will be stable by December 10, which is much earlier than the earlier deadline of December 15. According to the company, there has been a big improvement in on-time performance. Whereas last day the flights flying on time were only 30%, now it has increased to about 75%.
Indigo also said that several steps have been taken to return operational stability. The airline has also apologized for the inconvenience caused to the passengers and said that the situation will become completely normal soon.
Concern among investors – sharp fall in shares
DGCA’s action, network chaos and operational irregularities have increased the concern of investors. This is the reason why shares of InterGlobe Aviation slipped by about 7% in morning trading. Market experts believe that until flight operations are completely back on track and the DGCA issue is not resolved, the stock may remain under pressure.
