Shares of InterGlobe Aviation, the parent of India’s largest airline IndiGo, are expected to open lower on Wednesday, March 11, after the company’s chief executive officer, Pieter Elbers, exited his position on Tuesday, citing personal reasons.
On Tuesday, the company informed the exchanges that Pieter Elbers had resigned with immediate effect, prompting the founder and managing director, Rahul Bhatia, to step in as interim boss.
“As per our conversation, due to personal reasons, I herewith submit my resignation from the position of CEO of IndiGo with effect from today. I would request that the notice period be waived off,” Elbers said in his resignation letter.
Before joining IndiGo on September 6, 2022, Elbers was the president and chief executive officer of KLM for eight years. He was with KLM, Royal Dutch Airlines, for 30 years in various roles.
Co-founder and Managing Director Rahul Bhatia will manage the affairs of IndiGo on an interim basis until a new person is appointed, which the airline said is expected shortly. Significantly, this is the second time Bhatia has served as interim CEO, following his first stint in 2018, Mint reported earlier.
The exit came after a pilot-scheduling crisis forced 4,500 flight cancellations and stranded thousands last December, amid the airline’s struggle to comply with newly introduced pilot duty and rest regulations.
Meanwhile, the exit of Pieter Elbers has also come at a time when tensions in the Middle East have escalated, disrupting international routes, many of which are among IndiGo’s higher-yield markets.
IndiGo shares are down 10% in the last six sessions
The company’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 due to airspace closures, prompting the Street to worry that it could dent the airline’s quarterly earnings.
According to estimates by ICRA, 15–20% of the Indian aviation industry’s revenue is generated from flights travelling through West Asian airspace. These disruptions have resulted in revenue losses and higher costs owing to additional airport charges, as more aircraft remain grounded, along with increased fuel costs due to longer flight routes.
The rating agency further said prolonged and widening tensions could further increase crude oil prices, which would raise aviation turbine fuel (ATF) prices.
Along with the depreciation of the INR against the USD, the escalating costs could result in the Indian aviation industry reporting a higher net loss than ICRA’s projected ₹170–180 billion in FY2026.
Kotak 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.
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