IndiGo shares tumble! InterGlobe Aviation stock plunges 3% as CCI launches detailed probe

InterGlobe Aviation shares fell sharply on Thursday after Competition Commission of India (CCI) ordered initiating a detailed investigation into IndiGo over alleged unfair business practices. The stock dropped over 3% during the morning session. On the BSE, shares of the airline’s parent company slid 3.65% to Rs 4,782.45, while on the NSE they declined 3.63% to Rs 4,780.30. At 1:55 pm, IndiGo had fallen 72 points or 1.4% to 4,888 on NSE, while on Bombay Stock Exchange, the share was 1.5% down.The selling pressure followed a 16-page order passed by the competition regulator on Wednesday, in which it directed a full investigation into IndiGo. The order comes close to two months after the airline cancelled thousands of flights owing to operational issues, an episode that led to widespread inconvenience for passengers. Based on an assessment of airline data and information submitted by the aviation regulator DGCA, the CCI said it had formed a prima facie view that IndiGo had misused its dominant position in the market. The regulator observed that the scale of flight cancellations represented a sizeable share of the airline’s scheduled capacity.The commission noted that the cancellations amounted to an effective withdrawal of services from the market, resulting in artificial scarcity and reducing consumer access to air travel during periods of high demand.“Such conduct by a dominant enterprise may be viewed as restricting the provision of services under Section 4 (2) (b)(i) of the Act,” the CCI said.Section 4 of the Competition Act relates to the abuse of a dominant position. Citing a prima facie finding of an appreciable adverse effect on competition in India, the CCI directed its Director General (DG) to undertake a detailed investigation into the matter.