SpiceJet’s stock price dropped by almost 7% on August 30 after the Directorate General of Civil Aviation (DGCA) announced that the airline would be placed under enhanced surveillance. The stock opened with a 5.78% loss during Friday’s trading session and fell to an intraday low of Rs 62.01, marking a 6.37% decline.
The DGCA’s decision comes after a special audit of SpiceJet’s engineering facilities conducted on August 7 and 8, which revealed several deficiencies. In response, the aviation watchdog decided to increase spot checks and implement night surveillance to ensure the safety of the airline’s operations.
This is not the first time SpiceJet has been placed under enhanced surveillance; the DGCA previously took similar action in 2023 due to the airline’s troubled history. The recent decline in share price follows reports of financial stress and flight cancellations, including Thursday’s flight cancellations from Dubai due to unpaid dues to the Dubai airport.
In the June 2024 quarter, SpiceJet reported a 20% decrease in consolidated net profit, which fell to Rs 158 crore from Rs 198 crore in the same period the previous year. Despite these challenges, analysts at JM Financial believe that the sector’s earnings trajectory could improve due to capacity expansion and lower Aviation Turbine Fuel (ATF) prices.
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Source: Moneycontrol
News Desk
