Moody’s, a leading global credit rating agency, has stated that IndiGo’s inadequate readiness for long-anticipated aviation regulations resulted in significant flight disruptions, which is seen as a negative impact on their credit. The agency also emphasized that the turmoil exposed substantial deficiencies in the airline’s strategic planning and supervision, despite having ample time to prepare.
The extensive disruption caused by IndiGo, being India’s largest domestic airline holding almost two-thirds of the passenger market share, had far-reaching consequences. Flight cancellations spread across major cities like Delhi, Mumbai, Bengaluru, and Chennai, with industry approximations suggesting that over 1,000 flights were impacted in a short span, marking one of the most significant crises in the airline’s history.
The Directorate General of Civil Aviation (DGCA) has issued a show-cause notice to IndiGo, questioning their lack of readiness despite prior communication regarding revised duty regulations. Further regulatory actions by DGCA could escalate compliance costs and impose temporary operational restrictions, leading to investor unease. IndiGo has already refunded Rs 827 crore for ticket sales and reunited around 4,500 misplaced bags. Following a week of widespread flight cancellations and delays, the airline is gradually resuming operations, with approximately 1,500 flights on Saturday and 1,650 on Sunday, reconnecting with 135 out of 138 destinations.
InterGlobe Aviation, the parent company of IndiGo, has assured that corrective actions are in progress, a crisis response team is active, and punctuality levels are steadily improving throughout their network. Despite this, IndiGo’s stock price faced substantial downward pressure, closing at Rs 4,926.55 on the Bombay Stock Exchange, reflecting an 8.28% decline for the day.