SpiceJet share price falls nearly 5% after DGCA action against airline; stock down 9% in 2 sessions

SpiceJet share price slumped nearly 5 per cent to Rs 39.8 and 39.55 per share on the BSE and NSE, respectively, on Thursday. The Directorate General of Civil Aviation (DGCA) had on Wednesday extended the 50 per cent cap on SpiceJet flights by a little over one month as a matter of ‘abundant caution’, an official order said. 

The company’s share price on Wednesday declined over 4 per cent to settle at Rs 41.85 apiece on the exchanges from Tuesday’s close of Rs 43 per share. In the last two sessions, the stock has declined around 9 per cent on the bourses.  

The aviation regulator in its order also said during this period the airline company will be subjected to 'enhanced surveillance' by DGCA.  

DGCA had on July 27, 2022, ordered SpiceJet to operate a maximum of 50 per cent of its flights, which were approved in the summer schedule for a period of eight weeks owing to a series of incidents involving its flights. 

"...The review has indicated that there is an appreciable reduction in the number of safety incidents. However, as a matter of abundant caution, the competent authority has decided that the restrictions as imposed in the order dated July 27.07.20222 that continue to be in force till the end of the summer schedule (which ends October 29, 2022)," the DGCA said in its order. 

The Gurugram-headquartered budget carrier is facing an acute liquidity crunch for quite some time. SpiceJet posted a net loss of Rs 789 crore in the June quarter as well as Rs 458 crore for the quarter ended March 2022. 

The company in a statement on Tuesday said that it has sent certain pilots on Leave Without Pay (LWP) for three months from September 21. 

In the last one month, the counter underperforming the markets has declined around 50 per cent, while over 30 per cent in the last 6 months on the BSE as compared to nearly 1 per cent gain in Sensex in the last one year and around 2.5 per cent surge in 6 months.