IndiGo Shares Sink as Flight Cancellations Trigger Regulatory Threat

Shares of IndiGo, India’s largest airline, dropped another 8% on Monday following a severe operational breakdown that has caused thousands of cancellations and sparked the possibility of regulatory action. The airline’s total stock loss has now reached 16% since last week, wiping out nearly $4 billion in market value and bringing its current valuation to around $21 billion.

IndiGo, which controls about 65% of India’s aviation market, failed to adequately prepare for stricter pilot rest and night-flying regulations that took effect on November 1. Its rosters collapsed during the peak holiday and wedding travel season, leaving passengers stranded and prompting government intervention to control rising fares. On Monday alone, 127 flights were cancelled in Bengaluru and 32 in Mumbai, sources said.

Although IndiGo has stated that operations should stabilise by Wednesday, the civil aviation regulator has demanded the airline justify within 24 hours why disciplinary action should not be taken. Meanwhile, investors are betting on competitors benefiting from IndiGo’s crisis, with SpiceJet shares jumping 13.9% as the situation unfolds.

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