The Directorate General of Civil Aviation (DGCA), on Wednesday, in an unprecedented action ordered low-cost carrier SpiceJet to operate only 50% of its flights for eight weeks. Several planes of the airline reported technical malfunction recently.
The airline’s shares plunged by nearly 10% during early trades on Thursday, to reach their two-year low of ₹ 34.75 on the BSE. This slump in the counter is significant as the BSE Sensex was trading 733.21 points or 1.31 per cent higher at 56,549.53.
“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 DGCA’s order on Wednesday said.
During these eight weeks, the carrier will be subjected to “enhanced surveillance” by the Directorate General of Civil Aviation (DGCA).
SpiceJet on Thursday said that it is confident about scaling up its operations and addressing concerns of the DGCA. On Wednesday, it clarified that there will be no flight cancellations because of the regulator’s order. It said that it is already operating limited services “due to the current lean travel season.”
The DGCA in September 2021 revealed that the carrier was operating on a cash and carry model. Moreover, suppliers or approved vendors were not being paid on a regular basis, leading to the shortage of spares and frequent invoking of minimum equipment lists.
Over the past few months, several flights of the carrier have either turned back to their originating station or have made a landing with degraded safety margins. The DGCA in its order on Wednesday said that the airline is taking measures to arrest the trend of these incidents, however, it needs to sustain these efforts for a safe and reliable air transport service.
Written By Simran Bafna
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
To stay updated with the Latest Stock Market news, download our app here!
For editorial purposes, contact firstname.lastname@example.org
Start Your Financial Learning Journey
Want to learn Stock Market and other Financial Products? Make sure to check out, FinGrad, the learning initiative by Trade Brains. Click here to Register today to Start your 3-Day FREE Trail. And do not miss out on the Introductory Offer!!