IndiGo acknowledged that it had failed to adequately plan for the compliance deadline.
IndiGo Shares Crash as DGCA Issues Show-Cause Notice Over Massive Flight Cancellations
India’s largest domestic airline, IndiGo, shares slumped a further 8% on Monday.It happened after a week-long collapse that erased roughly USD 4 billion from its market value. According to market sources, the airline’s total losses over the week amounted to about 16% and it brought its market capitalization to around USD 21 billion.
This comes amid a massive disruption after thousands of flights were cancelled following new norms, which came into effect on November 1. IndiGo acknowledged that it had failed to adequately plan for the compliance deadline.
On Monday, the airline cancelled 127 flights at Bengaluru and 32 at Mumbai.It affected thousands of passengers stranded at the airports.
The Directorate General of Civil Aviation (DGCA) has issued a formal show-cause notice to IndiGo in response.It asked the company to explain reasons for why regulatory action should not be taken.. The DGCA reportedly demanded a response within 24 hours.
The regulator said that IndiGo did not make “adequate arrangements” to comply with the newly enforced duty-time rules.It cited serious issues in rostering and crew management.The airline’s internal planning faltered under the new norms and it resulted in widespread cancellations and passenger distress.
As the crisis happened, investors grew wary. While IndiGo scrambled to stabilize operations and expressed confidence that services could normalize by mid-week, shares of rival airline SpiceJet jumped nearly 14% on Monday as market participants bet on a potential shift in market share.
IndiGo continues to hold a dominant 65% share of the domestic market, but the operational disruption and regulatory scrutiny have raised serious questions about short-term stability. The airline’s scale offers resilience, yet the current is a reminder that even market leaders are vulnerable when operational discipline and regulatory compliance slip.
Source: Reuters
