IndiGo shares crash 9% as flight disruptions persist; DGCA flags planning lapses, demands CEO response today

IndiGo on Sunday cancelled over 650 flights, even as disrupted operations showed signs of stabilising with a decline in cancellations.

InterGlobe Aviation shares declined on Monday as IndiGo’s nationwide operational crisis entered its seventh day, with flight delays and cancellations continuing to disrupt schedules across major airports. InterGlobe Aviation (IndiGo) stock fell nearly 9 percent to close at Rs 4,907.50, even as the airline worked to stabilise operations amid regulatory scrutiny and passenger complaints.

Delhi airport issued an early-morning advisory cautioning travellers that IndiGo disruptions were likely through the day, urging them to check flight status before heading to the terminal. The warning came after IndiGo cancelled more than 2,000 flights over six days, triggering widespread chaos, missing baggage, and refund delays for thousands of passengers.

On Sunday, the carrier operated about 1,650 of its scheduled 2,300 flights, while roughly 650 remained cancelled. IndiGo said it has processed Rs 610 crore in refunds and delivered around 3,000 pieces of delayed baggage. The airline has also waived change and cancellation fees for travel between December 5 and 15.

Regulatory pressure intensified as the Directorate General of Civil Aviation (DGCA) granted a one-time 24-hour extension to CEO Pieter Elbers to respond to a show-cause notice issued on December 6, after IndiGo officials sought more time citing operational constraints. The regulator set a final deadline of 6 pm on Monday and warned that the case would be decided ex parte if no comprehensive reply is submitted.

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The DGCA’s notice accused IndiGo of “significant lapses in planning, oversight and resource management”, and inadequate preparation for the new Flight Duty Time Limitations (FDTL) norms that took effect recently. The regulator also flagged shortfalls in mandatory passenger assistance during the disruption.

The crisis has its roots in a string of operational setbacks that compounded through last week. Devesh Agarwal, Chief Analyst at BangaloreAviation.com, described the cascading failures as a “death by a thousand cuts”, ranging from weather issues and an Airbus A320 software glitch to baggage belt failures and localised airport constraints. He termed the implementation of revised FDTL rules the “coup de grâce”, saying airlines had deferred compliance for years and were likely caught off guard when the DGCA declined further extensions.

IndiGo has announced a 10 percent capacity reduction to stabilise its network, which Agarwal called a “tacit admission” of the challenges but a professional step to reset operations. He expects the short-term impact on InterGlobe Aviation’s share price to be negative but remains optimistic about the airline’s long-term fundamentals.

Brokerage commentary last week underscored concerns about rising costs and near-term earnings pressure. Citi maintained a ‘buy’ call with a Rs 6,500 target price, while Morgan Stanley trimmed its target and cut EPS estimates for FY27 and FY28 by 20 percent, citing higher crew-related costs due to the new duty norms.

InterGlobe Aviation shares have risen 7 percent so far this year and trade at a price-to-earnings ratio of 39.02. The airline has said it expects operations to stabilise by December 10.

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