India, Dec. 9 -- IndiGo is staring at "significant" financial damage due to the ongoing crisis stemming from rampant flight cancellations, Moody's Ratings said, thereby raising questions on the "too big to fail" status of India's largest airline by passengers carried.

"The disruptions are credit negative because IndiGo could face significant financial damage from loss of revenue because of flight cancellations, refunds and other compensation.," Moody's Ratings analysts Nidhi Dhruv and Vikash Halan wrote in a 8 December note. The show-cause notice to CEO Pieter Elbers "could ultimately affect continuity of senior leadership at IndiGo."

IndiGo is facing increasing heat for the mass cancellations that left thousands of passengers stranded ...