IndiGo shares decline 21% in December so far; CEO Elbers to appear before DGCA on Thursday; know all new developments

Shares of IndiGo parent InterGlobe Aviation declined as much as 3.3% to an intraday low of ₹4,645 apiece on Thursday, December 11, as CEO Pieter Elbers has been summoned by the Directorate General of Civil Aviation (DGCA) to submit a comprehensive report, including data and updates, on the recent operational disruptions.

The crisis-hit airline had cancelled 60 flights from Bengaluru Airport on Thursday, as safety watchdog DGCA tightened its scrutiny following large-scale disruptions in services on account of planning failures related to the implementation of new pilot and crew duty norms.

On Wednesday, IndiGo Chairman Vikram Mehta spoke for the first time in 10 days about the crisis, apologising for the chaos and attributing the massive disruptions to a combination of internal and external "unanticipated" events.

In a video message, he also said that the board has decided to involve external technical experts to work with the management and help determine the root causes that led to the disruption.

“On December 3, an unexpected chain of events led to large-scale flight cancellations ... Thousands of our passengers were left stranded ... I know how much distress this has caused. I want to say very simply and very clearly, we are sorry,” Mehta said.

Since last week, IndiGo has cancelled thousands of flights nationwide after failing to plan for tighter safety regulations. The cancellations peaked on December 5 and have declined since. The airline on Tuesday said its operations have stabilised and are back to normal levels.

"We did not meet your expectations during those days. And for that, we are truly, truly sorry," he said. Over the past week, there has been a lot of criticism, "some fair, some not," Mehta said.

"The fair criticism is that the airline let you down. We owe answers to our customers, to our government, to our shareholders and, equally importantly, to our employees. We assure you that we will examine every aspect of what went wrong, and we will learn from it," he said.

The board has decided it will involve external technical experts to work with the management and help determine the root causes and ensure "corrective action" so that this level of disruption never occurs again, he stated.

He, however, said that some allegations, like IndiGo engineering the crisis and "compromising safety", are "untrue".

DGCA to deploy staff inside IndiGo HQ

In another development, aviation watchdog DGCA will station its personnel at IndiGo's headquarters as it steps up oversight on India's largest airline.

The DGCA has formed an oversight team of eight senior captains, and two of them, along with two government officials, will be stationed at IndiGo's Gurgaon headquarters to monitor cancellation status, crew deployment, unplanned leave, and routes hit by staff shortages.

"Both these teams will submit a daily report," the DGCA said in the two-page order.

DGCA also summoned IndiGo Chief Executive Pieter Elbers to appear at its office on Thursday and submit a complete report, along with comprehensive data and updates, relating to the recent operational disruptions, according to a statement.

Meanwhile, DGCA has decided to carry out immediate on-site inspections to assess IndiGo's operations across 11 domestic airports.

All assigned officers will visit their respective airports in the next 2-3 days and submit a comprehensive report to the Director of Operations for the flight safety department at the DGCA in New Delhi within 24 hours of their visit.

The civil aviation ministry on Tuesday said it has ordered Indigo to reduce its flight schedule by 10% as it would help the crisis-ridden airline to stabilise operations, which have been disrupted massively due to the transition to the second phase of the new flight duty norms for pilots.

IndiGo share price

Since the beginning of the disruptions, IndiGo shares have tumbled over 21% in December so far.

On Thursday, after opening at ₹4,650 apiece, shares of the airline had touched a low of ₹4,645 per share. At 11:40 AM, IndiGo shares were trading at ₹4,781 per share, falling 0.51%.

The stock has slipped 11% in the last five trading sessions and 15% over the last six months. However, on a year-to-date basis, IndiGo shares have gained more than 4%.

The company’s market capitalisation stands at ₹1.85 lakh crore.