SpiceJet plunges 5% after DGCA extends suspension

New Delhi: Shares of SpiceJet continued to slide, dropping another 5 per cent, on Thursday after DGCA extended the flight cap or the suspension on the airline operator till October 29.

In a blow to the budget carrier, the Director General of Civil Aviation (DGCA) said that it is extending domestic SpiceJet's suspension to operate at 50 per cent capacity till October 29.

In its order dated September 21, the aviation regulator said that it is extending the restriction imposed on the budget carrier as a cautionary measure. In the meantime, SpiceJet shall be under 'enhanced surveillance' by the DGCA.

Following the update, shares of SpiceJet plunged 5 per cent to Rs 39.80 on Thursday before recovering to Rs 40.2 at 9.50 am. The scrip had settled at Rs 41.85 on Wednesday.

On 27 July, the regulator had asked SpiceJet to cut the total number of flights by 50 per cent for eight weeks after repeated safety incidents with the airline

In its fresh order on Wednesday, the regulatory body said that if SpiceJet wants to operate more than 50 per cent of its fleet then it will have to prove to the DGCA that it has adequate technical support and financial resources to increase its capacity.

A day prior to this notification, the Gurugram-based low-cost airlines had sent its 80 pilots for a three-month unpaid leave as a cost-saving measure.

Shares of SpiceJet have been on a downward spiral for quite some time. The stock has dropped about 12 per cent in the last one month, whereas it has plunged 42 per cent in 2022 so far.

While the airline had filed for 4,192 flights per week for the summer which is around 600 daily flights, industry sources said that the airline has been operating less than 300 flights for the last one month.

DGCA had in the first week of July issued a show cause notice to SpiceJet for its failure to establish safe, efficient and reliable services following a spate of eight incidents within a month.