IndiGo’s sharp slide in the stock market continues, with the share price tumbling 9% in the intraday trade today. This marks the airline’s seventh straight day of decline, as investors react to widespread cancellations, operational lapses and regulatory pressure that first erupted last week.
Over the last five trading sessions, the share price of IndiGo has already fallen 16%.
The latest trigger came from the Delhi Airport’s advisory that IndiGo flights may continue to face delays, just days after the Directorate General of Civil Aviation (DGCA) issued a show-cause notice to the airline. The aviation regulator is probing why IndiGo failed to adequately plan for updated Flight Duty Time Limitations (FDTL), the rules that govern pilot working hours.
A week of chaos that triggered a market meltdown
IndiGo’s troubles escalated dramatically on December 5, when more than half its flights were cancelled in a single day, leaving thousands stranded across major airports. The company attributed this to a system reboot coinciding with new duty rules for pilots, but the DGCA was unconvinced.
In its notice, the regulator said the airline showed “serious shortcomings in planning, supervision, and resource management,” which resulted in major service disruptions. The DGCA added that the primary reason for the collapse was IndiGo’s failure to align staffing and crew rosters with new fatigue-management rules under the Flight Duty Time Limitations.
Let’s take a look at the brokerage house JM Financial take on this and the reasons why it is cautious –
JM Financial on IndiGo: Why the brokerage remains cautious
According to the brokerage report by JM Financial, the recent meltdown stems from a combination of regulatory rule changes and IndiGo’s own operational gaps. The firm has maintained a ‘Reduce’ rating on the stock, warning that the financial hit may not be limited to the short term.
The brokerage noted that IndiGo’s operational expansion and tight cost structure had historically played a big role in its valuation. But the new disruptions have exposed deeper structural issues. As per the report, the recent cancellations were “largely a function of new FDTL norms impact kicking in immediately post Airbus software upgrade challenges.”
JM Financial added that the FDTL transition has exposed multiple planning lapses. The revised rules such as longer weekly rest hours, limits on consecutive night duties and expanded night-time restrictions have increased the required number of pilots significantly. The report said IndiGo “under-forecast captain (P1) requirements, delayed command upgrades, relied on reactive leave buybacks, and failed to realign rosters despite repeated DGCA warnings.”
JM Financial on IndiGo: Regulators tighten the scrutiny
As the disruptions spread, regulators moved to stabilise the situation. JM Financial highlighted that authorities have taken a “firm yet pragmatic stance” by balancing rules with flexibility.
According to the report, regulators placed the new Flight Duty Time Limitation rules in abeyance temporarily, allowed pilot leave to count as weekly rest, and simultaneously launched deeper investigations. A four-member committee has been set up to audit IndiGo’s manpower planning and compliance with Crew Resource Management rules. Show-cause notices to the Chief Executive Officer (CEO) and Chief Operating Officer (COO) are also part of this review.
The consumer affairs ministry has stepped in too, capping fares on affected routes and ordering all refunds to be cleared by December 7.
JM Financial on IndiGo: What lies ahead ?
IndiGo has acknowledged the “serious operational crisis” and reset its entire system like reworking its network, adjusting crew rosters, and preparing for a slower capacity ramp-up in the coming weeks. According to the brokerage report, the airline expects operations to normalise between December 10–15, although this means lower aircraft utilisation in the near term.
JM Financial estimated that if disruptions last around 15 days, the airline could face an 8–9% earnings hit for FY26, not including any penalty imposed by regulators. The brokerage added that the stock has not yet fully priced in “structural cost increase driven by regulatory actions” or a potential management change if required.