IndiGo shares slip over 3% as aviation ministry orders to reduce flight schedule by 10%; here are all recent developments

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.

Civil Aviation Minister K. Rammohan Naidu, in a statement, also said that IndiGo CEO Pieter Elbers was summoned to the ministry to provide an update, and he “confirmed” that 100% of the refunds for flights affected till December 6 have been completed.

“A curtailment of 10% (in IndiGo's flight schedule) has been ordered. While abiding by it, IndiGo will continue to cover all its destinations as before,” Naidu said in the statement.

Previously, aviation safety regulator DGCA had also issued an order, saying that IndiGo's flight schedule was being cut by 5%.

The ministry considers it “necessary” to curtail the overall IndiGo routes, which would help in stabilising the airline's operations and lead to reduced cancellations, he said.

Starting early this month, IndiGo cancelled thousands of flights, causing severe hardship to lakhs of passengers, and there was complete chaos at airports.

Naidu also said that IndiGo has been instructed to comply with all the directives of the ministry, including fare capping and passenger convenience measures, without any exception.

During the last week, many passengers faced severe inconvenience due to Indigo's internal mismanagement of crew rosters, flight schedules and inadequate communication, the minister said.

“While the enquiry and necessary actions are underway, another meeting with Indigo's top management was held to review the stabilisation measures. On Tuesday again, IndiGo CEO Pieter Elbers was summoned to the ministry to provide an update,” Naidu said.

ICSI cites lapses at IndiGo

Further, company secretaries' apex body ICSI on Tuesday also cited the governance lapses at the country's largest airline and called for stronger governance practices to ensure proactive risk identification, timely intervention and transparent communication.

The Institute of Company Secretaries of India (ICSI) has more than 78,000 members. In a statement, the institute flagged the "recent governance lapse highlighted by the IndiGo incident".

ICSI President Dhananjay Shukla said the IndiGo incident serves as a reminder for corporates and professionals to ensure sound governance frameworks that can create as well as preserve shareholder value along with public trust.

IndiGo has been facing significant operational disruptions for the last week, resulting in hundreds of flight cancellations and delays. The situation is stabilising now.

IndiGo cancelled nearly 200 flights

On Wednesday, IndiGo cancelled nearly 220 flights at three major airports, including Delhi and Mumbai, despite Chief Executive Officer Pieter Elbers claiming that the airline's operations were back on track.

According to sources, the crisis-ridden airline cancelled 137 flights at Delhi airport and 21 services at Mumbai airport. IndiGo cancelled 61 flights at Bengaluru airport, including 35 arrivals and 26 departures, people with knowledge told news agency PTI.

IndiGo had cancelled 460 flights from six metros alone on Tuesday.

IndiGo share price

Since the beginning of the disruptions, IndiGo shares have tumbled 15.5% from December 2.

On Wednesday, after opening at ₹4,999.50 apiece, shares of the airline had touched a low of ₹4,788.50 per share. At close, IndiGo shares settled at ₹4,810 per share, falling 3.17%. The stock was the biggest laggard on the NIFTY50 index.

The stock has slipped 11% in the last five trading sessions and 12% over the last six months. However, on a year-to-date basis, IndiGo shares have gained more than 7%.

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