IndiGo's market cap plunges by ₹25,000cr amid flight cancellations
What's the story
InterGlobe Aviation Ltd, the parent company of India's largest airline IndiGo, has seen a massive drop in its market capitalization. The company's stock has been on a downward spiral for six consecutive sessions, losing nearly 11% or ₹25,000 crore in market capitalization, during this period. The decline comes as IndiGo continues to face operational disruptions and mass flight cancellations across the country.
Market impact
Stock performance and impact on retail shareholders
InterGlobe Aviation's stock was trading at ₹5,276.5 on the National Stock Exchange (NSE), down 3% from yesterday. The ongoing crisis not only affects customers caught in IndiGo's disruptions but also impacts over 2.9 lakh retail shareholders of the company. Since late November, IndiGo has canceled hundreds of flights with the situation worsening over the past three days, leaving passengers scrambling for information at airports across India.
Operational issues
IndiGo's operational challenges and future plans
On December 5, IndiGo canceled all its flights from Delhi's Indira Gandhi International (IGI) Airport till midnight due to insufficient roster arrangements for new aviation safety norms. The airline canceled 102 flights at Bengaluru, leaving hundreds of passengers stranded overnight. IndiGo has informed the Directorate General of Civil Aviation (DGCA) that it will restore full operations by February 10. Meanwhile, DGCA has withdrawn the rule that prohibited airlines from substituting crew's weekly rest with accumulated leave to ease IndiGo's crisis.