IndiGo shares drop 4% as CCI orders probe into Dec flight disruptions
More than 10.4 lakh passengers were affected by flight cancellations in December, with over 93 per cent of the total passengers getting impacted by IndiGo cancellations
SI Reporter Mumbai Shares of InterGlobe Aviation Ltd. fell nearly 4 per cent on Thursday, suffering another setback as the competition watchdog ordered an investigation into the airline for abuse of its dominant market position.
The airline's stock fell as much as 3.64 per cent during the day to ₹4,780 per share, the biggest intraday fall since January 23 this year. The stock pared losses to trade 1.9 per cent lower at ₹4,869.3 apiece, compared to a 0.46 per cent decline in
Nifty 50 as of 9:41 AM.
Shares of the company snapped a three-day winning streak and currently trade at 1.3 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 4 per cent this year, compared to a 2 per cent advance in the benchmark Nifty 50. IndiGo has a total market capitalisation of ₹1.88 trillion.
CCI orders an investigation into IndiGo
The
Competition Commission of India (CCI) ordered an investigation into the airline after finding evidence that it abused its dominant market position. The Commission said the airline appeared to have caused an appreciable adverse effect on competition by restricting its services.
The Commission noted that by cancelling thousands of flights, representing a significant proportion of its scheduled capacity, IndiGo had effectively withheld services from the market. This, it said, created an artificial scarcity and limited consumer access to air travel during a period of peak demand.
IndiGo cancelled more than 4,200 flights between December 1 and 9. The disruption was triggered by the airline’s failure to manage its pilot duty roster after the DGCA fully implemented stricter rest and duty regulations last month. The new rules increased weekly rest requirements and reduced the number of hours pilots can fly at night.
More than 10.4 lakh passengers were affected by flight cancellations in December, with over 93 per cent of the total passengers getting impacted by IndiGo cancellations. DGCA data also showed that scheduled domestic airlines shelled out over ₹24.27 crore towards compensation and facilities for flight cancellations that affected more than 10.46 lakh passengers in December.