SpiceJet hits 2-year low after DGCA cuts 50% flight ops; stock slips 10%

Indian aviation regulator DGCA directed the low-cost airline to operate only 50 per cent of its flights for eight weeks.

Shares of SpiceJet hit over two-year low of Rs 34.60 and slipped 10 per cent on the BSE in Thursday’s intra-day trade after Indian aviation regulator Directorate General of Civil Aviation (DGCA) directed only 50 per cent flight operation for eight weeks.

The stock of airline company quoted its lowest level since March 2020. At 09:56 AM; it traded 7 per cent lower at Rs 35.75, as compared to 0.96 per cent rise in the S&P BSE Sensex. SpiceJet has corrected 60 per cent from its 52-week high level of Rs 87.25that it had touched on November 24, 2021.

The airline operates fleet of Boeing 737s, Q‐400s and freighters. SpiceJet is country’s largest regional player with 63 daily flights under UDAN or the Regional Connectivity Scheme. The majority of the airline’s fleet offers SpiceMax, the most spacious economy class seating in India. The airline also operates a dedicated air cargo service under the brand name SpiceXpress, which offers cargo connectivity across India as well as international routes.

In the first week of July, DGCA had issued a show cause notice to SpiceJet for its failure to ensure safe, efficient and reliable services after eight incidents within a month. The airline was asked to explain in three weeks why no action should be taken against them. Before this, last year after a financial audit, DGCA found out about SpiceJet's inadequate pool of spare parts. CLICK HERE FOR FULL REPORT

Meanwhile, SpiceJet has not yet announced their financial results for the quarter and financial year ended March 31, 2022, due to the ransomware attack on their IT systems. On May 27, 2022, the company said that it is taking the corrective measures with assistance of cyber experts and authorities on the issue.

For the first nine months ended December 2021 (9MFY22), SpiceJet had reported a consolidated net loss of Rs 1,259 crore against loss of Rs 773 crore in 9MFY21.