The move is a temporary measure to rationalise cost, the Gurgaon-headquartered airline said
Shares of budget carrier SpiceJet opened 3.5 percent lower on September 21, a day after the company asked 80 of its pilots to go on a three-month leave without pay.
“This measure, which is in line with SpiceJet’s policy of not retrenching any employee which the airline steadfastly followed even during the peak of the Covid pandemic, will help rationalise the pilot strength vis-à-vis the aircraft fleet,” the airline said in a statement.
The stock was trading at Rs 42 apiece at 9:30 am, and was among the top five losers on the BSE Smallcap index.
The pilots who have been forced to go on leave without pay are from the airline’s Boeing and Bombardier fleet.
The company has been in news of late for all the wrong reasons. A slew of flight mishaps this year has taken investors and passengers by shock. This includes collision with electric poles, severe turbulence, malfunctioning weather radar, technical faults and engine fires.
On the back of this, the Directorate General of Civil Aviation (DGCA) on July 27 ordered SpiceJet to operate 50 percent of approved flights for the next eight weeks following multiple snags.
The stock has declined 38 percent in 2022 so far and is down 47 percent in the last 12 months.
The carrier reported a loss of Rs 788.82 crore in the three months ended June, which was the best quarter in terms of passenger traffic after the lockdown.
“Given the de-registration of its aircraft, lack of transparency for investors, replacement of cheap Boeing planes and a weak balance sheet, we are reducing FY23E EBITDAR by 27 percent and the target price to Rs 49 (earlier: Rs 67),” Edelweiss Securities said. It has a ‘hold’ rating on the stock.?
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