IndiGo's Parent InterGlobe Aviation Shares Face Potential Gap-Down Opening on Wednesday

InterGlobe Aviation Share Price Expected to Open Lower

On March 11, shares of InterGlobe Aviation, the parent of IndiGo, India's largest airline, are expected to open lower following the sudden resignation of CEO Pieter Elbers. Elbers cited personal reasons for his departure, which took effect immediately.

Rahul Bhatia, founder and managing director, has stepped in as interim CEO until a new person is appointed, which is expected shortly. This is Bhatia's second stint as interim CEO, following his previous tenure in 2018.

The exit comes amid pilot-scheduling crisis that led to 4,500 flight cancellations and stranded thousands in December. The crisis was triggered by the airline's struggle to comply with newly introduced pilot duty and rest regulations.

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Tensions in the Middle East have exacerbated the situation, disrupting international routes, many of which are among IndiGo's higher-yield markets. The airline's shares have lost 10% of their value since the start of the US-Iran war in February, which led to a massive rise in crude oil prices and hundreds of flight cancellations to West Asia.

ICRA estimates that 15-20% of the Indian aviation industry's revenue is generated from flights traveling through West Asian airspace. Disruptions have resulted in revenue losses and higher costs due to additional airport charges, increased fuel costs, and longer flight routes.

Kotak has upgraded IndiGo to a 'Buy' rating with a price target of ₹5,500 per share, implying a potential upside of about 25% from current levels.