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Informist, Wednesday, Dec. 10, 2025

 

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--ICRA:See major near-term fincl hit on IndiGo due to operational disruptions 
--ICRA: IndiGo's ability to restore brand loyalty will be critical 
--ICRA: IndiGo's profitability for FY26 will remain under pressure 
--ICRA: Medium-term credit impact on IndiGo should be largely manageable 
--ICRA on IndiGo:Will continue to monitor cost impact of new regulatory norms 
--ICRA: Will monitor continuity of IndiGo's senior leadership 

 

MUMBAI – Credit rating agency ICRA said the near-term financial performance of InterGlobe Aviation Ltd.-run IndiGo airline is expected to be significantly impacted due to the recent operational crisis. This would be due to revenue loss from cancellations, issuing of refunds, higher operating costs to compensate affected passengers, and potential penalties following an ongoing regulatory inquiry, ICRA said in its report. However, the rating agency did not give the quantum of potential financial hit on the company. 

ICRA's comments came after the aviation giant failed to meet the Directorate General of Civil Aviation's norms with respect to pilot resting period, following which the company had to cancel more than 4,000 flights that led to chaos in airports across the country. The airline's profitability for 2025-26 (Apr-Mar) will remain under pressure, not only from operational disruptions but also from the depreciation of the Indian rupee against the US dollar, ICRA said. The rupee has depreciated amost 6% against the dollar so far in FY26 and hit a record low of 90.4225 last week. 

 

For the quarter ended September, InterGlobe Aviation had reported a net loss of INR 26.14 billion on a revenue of INR 185.55 billion.

 

The agency also said that IndiGo was the worst affected by the revised flight duty time limitation norms, given its high aircraft utilisation and extensive night-time operations, which meant limited operational buffers compared with peers. "While IndiGo's lean cost structure has historically been a differentiator in a competitive market, the scale of disruption highlights gaps in resource planning." 

 

While near-term concerns about the company persist, ICRA said the medium-term credit impact of the operational crisis should be largely manageable. Though the crisis impacted IndiGo's brand value for now, it may not necessarily have a lasting impact, ICRA said, adding that the company's ability to restore brand loyalty will be critical. 

 

IndiGo offers competitively priced services and has a long and consistent record of providing reliable services across its large network. The airline has a 65% market share in India and holds a commanding position in the Indian aviation market, which puts it in a favourable position that tends to make it the default choice for a large proportion of travellers, ICRA said. 

 

The agency will continue to monitor developments such as the cost implications of implementing the new regulatory norms, its ability to pass on incremental costs to travellers, and continuity of its senior leadership, among others. Civil Aviation Minister K. Ram Mohan Naidu said the government would take strict and appropriate action, including sacking IndiGo Chief Executive Officer Pieter Elbers, if required, The Times of India reported Wednesday. 

 

The crisis also pulled down the company's share prices sharply in more than a week. Of nine trading sessions, the stock closed lower eight times, falling almost 19% during this period. On Wednesday, its shares closed 3.3% lower at INR 4,805.50 on the National Stock Exchange.  End

 

Reported by Anjana Therese Antony

Edited by Tanima Banerjee

 

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