Spicejet benefits from Jet Airways debacle
The adage 'one man's loss is another's gain' stands true in the Indian Aviation sector. The market is rife with news reports that lessors of Jet Airways have offered the aircraft grounded for non-clearances of dues to rival airline Spicejet.
Reacting to this development, the stock of Spicejet Limited opened at Rs. 81.00 per share and hit an intraday high of Rs. 84.45 in early trade. In the afternoon session at 12:45 hours, the stock was quoting Rs. 82.65 per share, up by Rs. 3.90 or 4.95 per cent. While Jet Airways was trading at Rs. 218.35 per share, down by Rs. 10.70 or 4.67 per cent on BSE.
The lessors of Jet Airways have withdrawal and grounded 50 aircraft belonging to Jet Airways' fleet. Jet Airways expressed its inability to pay lessors their dues failing to funds the working capital needs of its operations.
On the other hand, Spicejet is facing a shortage of aircraft after the Indian civil aviation regulators instructed it to ground all of its 12 Boeing 737 Max 8 aircraft on safety concerns. Boeings 737 Max 8 have been grounded globally following two gruesome air crashes in a span of less than six months. Earlier this month, a passenger aircraft of the Ethiopian Airlines crash soon after take-off killing 157 people. This accident had close similarities to the Lion Air crash that happened in October 2018, also killing all on board.
Also, on Tuesday, low-cost carrier SpiceJet joined the International Air Transport Association (IATA). This membership will enable the airline to expand through codeshare agreements with other global carriers.