On Thursday, SpiceJet shares fell 10% on the BSE and reached a two-year low of Rs 34.60.
SpiceJet was requested by the aviation regulator DGCA to cut its services in half for eight weeks, which caused the company’s shares to drop 10% and to a two-year low of Rs 34.60 on the BSE on Thursday. SpiceJet responded by stating that it has already been operating at half of its authorised capacity, therefore negating the impact of the regulator’s stringent rule on its business.
In view of the findings of various spot checks, inspections and the reply to the show cause notice submitted by SpiceJet, for the continued sustenance of safe and reliable transport service, the number of departures of SpiceJet is hereby restricted to 50 per cent of the number of departures approved under summer schedule 2022 for a period of eight weeks,” the aviation regulator’s order on Wednesday said.
DGCA on Wednesday had said any increase in the number of flights will be subject to “the airline demonstrating to the satisfaction of DGCA that it has sufficient technical support and financial resources to safely and efficiently undertake such enhanced capacity.”
The action was taken shortly after the Indian aviation ministry informed the house that SpiceJet had not been the subject of “any major substantial finding or safety breach” by the DGCA.
Two separate air safety issues were recorded by SpiceJet earlier in July, one of which required an emergency landing in Pakistan for a plane headed for Dubai because of a cockpit light malfunction.
The airline company’s stock recently traded at its lowest level since March 2020. It traded 7% lower at Rs 35.75 at 09:56 AM compared to the S&P BSE Sensex’s 0.96 % gain. SpiceJet’s 52-week high of Rs 87.25, which it reached on November 24, 2021, has been adjusted by 60%.
In comparison to the Nifty Smallcap 100’s growth of 56.64 percent over the past three years, the stock has had a negative return of 73.94 percent. A low-cost airline called SpiceJet has a market value of Rs 2,142.40 crore.
The DGCA had given SpiceJet a show-cause notice in the first week of July for failing to provide services that were safe, effective, and reliable.
Due to the ransomware assault on their IT systems, SpiceJet has yet to release its financial reports for the period and fiscal year ending March 31, 2022. The corporation said on May 27, 2022 that it is taking corrective action with help from authorities and cyber specialists.
SpiceJet recorded a combined net loss of Rs 1,259 crore for the first nine months ended December 2021 (9MFY22), compared to a loss of Rs 773 crore in 9MFY21.
