Shares of India’s largest airline, IndiGo, fell by 8% on Monday as it continues to grapple with an operational crisis causing mass flight cancellations and potential regulatory repercussions.
Since the crisis began last week, resulting in significant distress for customers and a PR challenge for the company, IndiGo’s stock has plummeted 16%, erasing around $4 billion from its market value, now estimated at $21 billion.
IndiGo, which holds 65% of the Indian market, admitted it was unprepared for the November 1 deadline to enforce stricter night flying and pilot rest regulations.
The airline’s scheduling issues coincided with December, a peak season for holidays and weddings in India, leading to widespread disruptions.
Thousands of flights were canceled, leaving passengers stranded and prompting government intervention to control rising airfares.
Other Indian airlines have not faced similar difficulties.
On Monday, IndiGo canceled 127 flights in Bengaluru and 32 in Mumbai, according to airport sources via Reuters.
On Sunday, IndiGo was optimistic about stabilizing operations by Wednesday, though the civil aviation authority demanded an explanation within 24 hours to avoid regulatory action.
Meanwhile, investors are betting on other airlines benefiting from IndiGo’s challenges. Shares of competitor SpiceJet, one of India’s few listed major airlines, soared by 13.9% on Monday.
