On Monday, InterGlobe Aviation, which owns IndiGo, experienced a sharp drop in stock price. During early trade, its shares fell 7%. This continues the airline's trend of losing for 7 consecutive trading sessions, due to ongoing delays with flights, regulatory scrutiny and poor quarterly financials.
The crisis continued to generate significant flight cancellations and delays last week. This has negatively impacted the overall sentiment of investors due to the disruption of thousands of passengers amid limited flight capacity. As a result, the Government has intervened to curb the sudden surge in airfares.
The issuance of a show-cause notice by the Directorate General of Civil Aviation (DGCA) is one of the prime reasons for the sustained drop in IndiGo’s shares.
The aviation regulator is investigating why the airline was not prepared for the new crew duty norms despite giving them prior instructions.
The DGCA, in its notice, highlighted major shortcomings in IndiGo's planning, supervision and resource management. It pointed out the wrong scheduling of crews, improper staffing and the failure to adhere to the revised Flight Duty Time Limitations (FDTL) framework.
The regulator’s findings raise the possibility of further oversight or temporary operating limitations, both of which could elevate costs at a time when the airline is already under financial strain.
Delhi Airport has advised travellers to be cautious when booking IndiGo flights, as they may continue to experience delays. Travellers should always check their flight status prior to departing the airport.
Delhi Airport has stated that it is working closely with IndiGo's team to mitigate congestion by providing assistance, as well as medical support, to passengers.
The continued disruption of IndiGo's operations indicates that normalised operations may take longer than expected, further increasing the concern in the marketplace regarding the airline's future business outlook.
IndiGo’s recently reported Q2 FY25 results further added concerns. The airline posted a net loss of Rs. 2,582 crore compared to a Rs. 987 crore loss in the year-ago quarter.
This fall came despite a 9.3% YoY rise in operating revenue to Rs. 18,555 crore, supported by improved capacity deployment.
However, rising foreign exchange costs substantially eroded profitability. Key operating metrics also weakened:
Capacity increased 7.8% to 41.2 billion
Passenger traffic increased 3.6% to 28.8 million
EBITDAR dropped sharply to Rs. 1,114 crore from Rs. 2,434 crore
EBITDAR margin fell to 6%, down from 14.3% last year
These figures highlight the strain on IndiGo’s cost structure and execution capability at a time when demand remains volatile.
Also Read: IndiGo Shares Slip Over 2% After Widespread Flight Disruptions