Why Are Spicejet Shares Cruising Today

The Directorate General of Civil Aviation (DGCA) has removed SpiceJet from its ‘enhanced surveillance regime’ causing shares of the budget airline to shoot by over 2% at the bourses.

What Happened? During this rigorous monitoring, DGCA inspected 23 of the airline’s planes and made 95 observations. They performed 51 spot checks at 11 locations on SpiceJet’s Boeing 737 and Q-400 planes. After the airline addressed the findings according to DGCA’s guidelines, the aviation authority lifted its enhanced surveillance.

At the time of writing, the DGCA had not returned Benzinga India’s request for more details on the observations made.

See also: ITC Hotels Demerger: What It Means For Shareholders?

Previously, SpiceJet faced increased scrutiny due to its financial difficulties. The DGCA implemented extra night-time monitoring and spot checks to ensure that the airline’s financial issues didn’t compromise flight operations or safety. Last July, after a series of safety incidents, DGCA halved SpiceJet’s total number of flights for eight weeks. They lifted this restriction last October.

Further financial troubles hit SpiceJet as the Supreme Court ordered it to pay ₹380 crore to its former promoter Kalanithi Maran. The airline also defaulted on aircraft lease payments, leading lessors to take legal action.

Price Action: Spicejet shares were trading 2.13% higher at ₹30.18 on Tuesday afternoon.

Read next: Ashish Dhawan Picks Up Stake In This Small Cap Stock That Has Gone Up 300% In 3 Years

Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.

Posted In: EquitiesMarketsDGCASpiceJet