IndiGo flight schedule continues to be hampered, stock down 2%
In a press release yesterday, IndiGo stated that DGCA had directed the company to ground nine A320neo aircraft, leading to cancellation of flights. The company has said that since they have multiple flights to the same destination, it has tried to accommodate passengers on those flights or allowed the passengers to cancel the booking and get a refund without any cancellation charges.
In the long term, we expect Indigo to benefit from India’s strong growth potential in aviation market. Indigo is transforming strategically, in order to gain market share through (1) shifting from pure sale and leaseback models to buying aircraft, (2) targeting shorter term leases, while the Neo engine issues are resolved, and (3) increasing focus on regional routes (inducting ATRs vs. single aircraft type). The profitability is expected to rise on improving yields and fleet modernization