IndiGo Crisis: IndiGo, the airline company which controls about 60 percent of the country’s domestic flights, is currently going through a serious crisis. The situation became so bad that the government had to intervene and DGCA issued a notice to the company. The same issue was also raised by the Congress party in the Lok Sabha on Monday. Due to continuous flight cancellations, delays and passenger complaints for the past one week, there was a negative sentiment in the market about IndiGo, which had a direct impact on its shares. There was a huge fall of up to 7 percent in Indigo shares during intra-day trading.
Big fall in Indigo shares
However, the airline says that it is trying to increase the number of flights and rapidly improve its on-time performance. Meanwhile, global brokerage firm Jefferies has described IndiGo’s current crisis as a “buying opportunity” for investors. Jefferies on Indigo’s shares buy While giving rating, target price has been fixed at Rs 7,025, which shows a possible gain of about 31 percent from the current price. According to the firm, regulatory changes made by the government and some operational shortcomings are responsible for IndiGo’s situation.
The airline company is trying for speedy recovery. IndiGo operated 1,650 flights on Sunday, whereas the number was 1,500 a day earlier. On-time performance also increased from 30 percent to 75 percent. Earlier, on December 5, the company had to cancel more than 1,000 flights in a single day. To handle the situation, Indigo took action over the weekend. Crisis Management Group (CMG) Formed, in which all key board members and senior leadership were included.
Airlines are recovering fast
CMG reviewed the operational situation through frequent meetings, while IndiGo CEO Peter Elbers, in a message to passengers, acknowledged that December 5 was an extremely challenging day for the company, when about 60 percent of daily flights had to be cancelled.
Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)
Read this also: Rupee is in bad shape against dollar, crossed 90 mark, know what is the reason for the collapse
