Spicejet shares take-off; USFAA lifts ban on Boeing 737 Max aircraft
Shares of Spicejet rallied over 13% Thursday, their biggest intra-day gain in nearly a year, after the US Federal Aviation Administration (FAA) lifted its 20-month ban on Boeing 737 Max aircraft and cleared it for flying.
SpiceJet has 13 Boeing 737 Max planes in its fleet and is the sole operator of these planes in India after Jet Airways was grounded.
The 737 Max jets, the key to SpiceJet’s fleet, were grounded in 2019 after two deadly crashes in a short span of time. The two fatal crashes killed 346 people within five months in 2018 and 2019 and led to a hailstorm of investigations.
SpiceJet expects the jets to return to operations by the first quarter of 2021. It can also receive compensation from Boeing for the 737 Max grounding, which could be in the range of Rs 1,000-1,200 crore.
The stock rose as much as 13.6% to its day’s high of Rs 75.40 per share. The stock has risen nearly 38% in just the past 4 sessions as the DGCA further eased restrictions and allowed airlines to sell seats up to 70% capacity from 60% earlier.
A strong cargo revenue and deferred expenses have helped the airline report better-than-expected second-quarter results.
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