Government clears NOCs for two new airlines; IndiGo stocks fall 2% 

Shares of InterGlobe Aviation fell by 1.85% to Rs 5,047.50 in the late hours of today’s trading session after the Indian government cleared no objection certificates (NOCs) for two new airlines. 

Union Aviation Minister Ram Mohan Naidu Kinjarapu announced the news through a post on X (formerly Twitter), saying that Al Hind Air and FlyExpress have received NOCs from the government to begin operations, after Shankh Air.

“Over the last week, pleased to have met teams from new airlines aspiring to take wings in Indian skies—Shankh Air, Al Hind Air and FlyExpress. While Shankh Air has already got the NOC from the Ministry, Al Hind Air and FlyExpress have received their NOCs this week,” the post read. 

He also added that schemes like UDAN help small carriers enter aviation and enhance regional connectivity. “Schemes like UDAN have enabled smaller carriers Star Air, India One Air, Fly91, etc. to play an important role in the regional connectivity within the country, and there is more scope for further growth,” he said in the post. 

IndiGo, which has been in troubled waters due to disruptions caused due to cancellations of flights since December 2, has left thousands of passengers stranded at airports. Because of its scale of operations and its market share of more than 60%, more than 4,000 flights were cancelled, causing huge inconvenience to passengers. 

The airline stock has fallen 12.55% in a span of a month, but on a year-to-date basis, the stock has risen 10%. The low-cost carrier recently made news as it made its entry into the Sensex, replacing Tata Motors Passenger Vehicles Ltd.

Motilal Oswal Financial Services, in its report, maintained a positive outlook, suggesting a 22% upside, reasoning that the company will still maintain its market share. IndiGo continues to command over 60% market share. However, such disruptions create opportunities for other airlines to capture market share and strengthen their position in the growing domestic travel industry. Despite this, in our opinion, IndiGo will remain the market leader (at the current share) over the long term, supported by its fleet expansion pipeline, addition of new destinations (domestic and international), efficient OTP, and competitive pricing."

The report pinned its hope on IndiGo’s long-term structural thesis remaining intact. "Its scale advantages, improving on-time performance, and disciplined pricing strategy should enable the airline to sustain market leadership and remain a core beneficiary of India’s travel and tourism boom.”