The shares of IndiGo-parent Interglobe Aviation jumped more than 2 percent sharply on December 18 after CEO Pieter Elbers told employees "the worst is behind us". This comes after the airline faced crisis earlier this month, leading to massive cancellations and chaos. The shares of the company rose to Rs 5,100 apiece in the morning.
In a video message to employees, IndiGo CEO Pieter Elbers said, "Through the storm, we found our wings again." He added that the last two weeks have been very challenging for all. "As IndiGo employees, we stood tall and united," he added. "Weathering this storm together with unwavering support for one another. Thank you to out pilots, cabin crew, airport staff, operations control, customer service and all functions who supported. Your collective dedication is the backbone of IndiGo," the executive can be heard as saying.
Elbers said that IndiGo has now restored its network to 2,200 flights today. "Given our scale and complexity, recovering such situation in short time is a testament to our teamwork and strength of our operating principles," he added.Earlier this month, IndiGo saw mass cancellations, leading to widespread chaos at India's major airports. A significant factor behind the chaos was a sharp shortage of crew, particularly pilots, following the introduction of revised Flight Duty Time Limitation (FDTL) norms. The new rules mandate more rest hours and humane rosters, but IndiGo has been struggling to realign its network accordingly.
Amid the crisis the airlines lost nearly Rs 37,000 crore in market value due to the disruption. The crisis escalated after the airline struggled to meet the regulator’s deadline for transitioning to the new duty-time rules.. Over the last three trading sessions, the scrip has gained nearly 3 percent.On the outlook, HSBC reiterated its ‘Buy’ rating on the stock, saying IndiGo’s long-term structural growth story remains intact. However, the brokerage lowered its target price to Rs 5,977 per share, implying an upside of more than 20 percent from the previous close.Jefferies, meanwhile, retained its ‘Buy’ rating with a target price of Rs 7,025 per share. The brokerage said IndiGo has been among the most affected by the new FDTL rules, which lower pilot duty hours and increase crew requirements. It added that the regulatory changes coincided with the airline’s capacity expansion, technical issues and airport congestion, resulting in cascading disruptions.