IndiGo Crisis: Due to the crisis on the country’s largest airline IndiGo, the government was forced to take action. Amidst the continuous cancellation of flights, increased fare prices and problems faced by passengers, the government even issued a show cause notice and fixed the fare cap. Meanwhile, rating agency Moody’s said that Indigo Crisis may have a major negative impact on the company in the coming days.
Negative impact on Indigo
The recent widespread disruption in flights may cause huge financial losses for the company due to revenue loss, fines and other compensation due to cancellation of flights. Moody’s Ratings said in a report released on Monday that the airline was not able to plan effectively for the new aviation rules implemented more than a year ago, due to which it is now suffering the consequences.
According to the rating agency, this situation is also negative for the reputation of Indigo. The chaos worsened amid the extremely busy winter flying season. The process of flight cancellations that started on December 2 reached its peak on December 5, when IndiGo had to cancel more than 1,600 flights. The airline has not yet been able to fully restore normal operations and more than 500 flights were canceled on Monday as well.
Damage to company reputation
Rating agency Moody’s further said that these irregularities could damage the company’s reputation, as IndiGo may face revenue loss, refunds, compensation to affected passengers and possible penalties by the DGCA. The agency cited the airline’s major lapses in planning, monitoring and resource management as the main reason for this, even though the industry was informed about the new rules long ago.
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