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Bloomberg
SpiceJet Ltd tumbled in Mumbai trading after India’s aviation safety regulator limited the number of seats the budget carrier can sell at 50% for eight weeks following several mid-flight incidents, a move that could severely hurt its ability to earn money.
SpiceJet shares fell as much as 9.7% on Thursday, the biggest intraday decline since May 6 and the most since December 2020 on a closing basis.
India’s Directorate General of Civil Aviation (DGCA) sanctioned SpiceJet, saying in a statement that its aircraft at times continued to fly or flew back to the origin airport with “degraded safety margins†caused by “poor internal safety oversight and inadequate maintenance actions.â€
While the airline is taking steps to mitigate the issues, it needs to sustain the measures for safe and reliable services, the DGCA said. The airline will be subject to “enhanced surveillance,†according to the order. The regulator’s decision is part of intensifying inspections of all airlines in India after a spate of non-fatal incidents.