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Stocks of SpiceJet hit over a two-year low of ₹34.60 and slipped 10 per cent during early trade on Thursday. This comes after the company was asked by aviation regulator Directorate General of Civil Aviation (DGCA) to curtail its services by half for eight weeks.
On Wednesday, the aviation watch dog said, “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 stocks recovered to close at ₹36.95 on the BSE after the airline said there will be no impact on its operations. In an internal communication reviewed by BusinessLine, Niti Verma, Vice-President - Human Resources, informed SpiceJet employees, “This is to reassure you that there is no reason or cause of concern,” and that operations will remain normal.
No impact on operations
When asked if it made an impact on the company’s operations, a source explained, “Due to the lean season most airlines have already curtailed schedule; hence, it won’t impact the company’s operations per se.”
SpiceJet was, in fact, flying only 50 per cent of the schedule due to a shortage of aircraft and aircraft spares. So while it will not impact the operation, it is a dent reputationally.”
On Thursday, SpiceJet issued a notice to the exchanges. It said: “SpiceJet is confident of scaling up its operations with the onset of the festive season and addressing any concern the regulator may have on priority.”
Technical malfunction
SpiceJet’s planes were involved in at least eight incidents of technical malfunction between June 19 and July 5.
Meanwhile, Indian carriers reported 478 technical snags between July 1, 2021, and June 30, 2022, according to a Lok Sabha response.
The Minister of Civil Aviation, Jyotiraditya Scindia, in a response in the Lok Sabha said the DGCA had carried out a total of 177 surveillance, 497 spot checks, and 169 night surveillance on engineering and maintenance aspects of scheduled operators during the last one year.
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