IndiGo shares rise as investors brush off record $2.45 million fine

Jan 19 (Reuters) – Shares of IndiGo rose as much as 3.8% on Monday, as investors brushed off a record $2.45 million fine imposed by India’s aviation regulator, a penalty that Jefferies’ analysts described as relatively modest in the wake of last month’s mass flight cancellations.

The airline scrapped about 4,500 flights in the first weeks of December, stranding tens of thousands of passengers nationwide, and highlighting concerns over limited competition in the world’s fastest-growing aviation market.

Indigo’s shares tanked 14.2% that month, its steepest fall since October 2024.

“Fines do look modest, likely because of regulatory caps,” Jefferies said in a note. “Focus now shifts to DGCA’s subsequent guidance on the normalisation of schedules once compliance milestones & systemic reforms are independently validated.”

The fine is equivalent to 0.31% of the carrier’s annual profit for fiscal 2025.

The Directorate General of Civil Aviation (DGCA) also issued warnings to senior executives and directed the India’s largest airline to remove the head of its operations control from his duties after mass flight cancellations last month.

A DGCA probe found several deficiencies at the airline after stricter pilot rest and duty rules came into effect last year, the regulator said in a statement.