IndiGo Shares Drop After Govt Orders 10% Flight Cuts

Crisis Unfolds

India's largest airline, IndiGo, faces regulatory heat after cancelling thousands of flights since early December, triggered by poor planning for revised Flight Duty Time Limitations (FDTL) and crew shortages. The government doubled DGCA's initial 5% cut to 10% across sectors, removing ~220 daily flights, prioritizing rival-heavy routes. IndiGo must submit a revised winter schedule by 5 PM today.​

Key Highlights

Scale of Disruptions: 951 cancellations in November from 64,346 approved flights; over 2,000 last week, including 1,000+ on Dec 5 alone, hitting Delhi/Bengaluru hardest.​

Regulatory Action: Aviation Minister Ram Mohan Naidu intervened post-DGCA notice; no end date for cuts, aims to stabilize ops and curb passenger woes.​

Stock Impact: Shares fell 17%+ over 8 sessions, erasing ₹40,000 Cr market cap; hit ₹4,850 amid brokerage target cuts (UBS to ₹6,350 Buy; Investec Sell ₹4,040).​

Airline Response: Claims ops stabilized at 90% on-time; provided passenger aid per norms, but faces show-cause scrutiny on CEO Pieter Elbers.​

Market Ripples

Brokerages flag rising costs (ATF up 6%, rupee at 90/USD); expect fare hikes, long-term growth intact via international push.​

Sources: Reuters (RTRS), Times of India, Hindustan Times, DGCA, Moneycontrol