BackSpiceJet expects to induct 27 planes in two weeks, shares hit 52-week high
SpiceJet will induct six more Boeing 737-800 NG aircraft on dry leaseSpiceJet shares rose as much as 15% to a 52-week high of ₹152
PremiumShares of SpiceJet today surged to a fresh 52-week high, a day after Jet Airways shut down all flight operations indefinitely after lenders declined to extend more funds to keep it going. SpiceJet shares rose as much as 15% to a 52-week high of ₹152 while another carrier InterGlobe Aviation, which operates IndiGo, also attracted strong buying. On the other hand, Jet Airways shares fell as much as 34%, in a sign that investors were sceptical about a revival despite lenders saying that they are "reasonably hopeful" that the bidding process for the grounded airline will end successfully.
Meanwhile, SpiceJet today said it will induct six more Boeing 737-800 NG aircraft on dry lease. These six aircraft are in addition to the 16 Boeing 737 planes and five 90-seater Bombardier Q400 planes that the airline will soon induct. The total number of planes SpiceJet plans to induct in the immediate future now stands at 27.
The airline has applied to the Directorate General of Civil Aviation for a no-objection certificate (NOC) to import the planes and expects these aircraft to join its fleet in the next ten days.
“We are taking all possible proactive measures to deal with the sudden reduction of aviation capacity in the Indian market. SpiceJet continues to work closely with the government and regulatory authorities to help minimise passenger inconvenience. We will induct as many as 27 planes in a record time of less than two weeks and are hopeful that these inductions will help considerably ease the pressure situation," said Ajay Singh, chairman and managing director of SpiceJet in a statement.
Currently, SpiceJet operates 516 average daily flights to 60 destinations, including 51 domestic and 9 international ones. The airline has a fleet of 48 Boeing 737, 27 Bombardier Q-400s and one B737 freighter.
"SpiceJet is best placed to capitalize on the situation due to its fleet structure – it is the only other Boeing operator in the market for narrow body aircraft," said SBICap Securities in a April 15 note. SBICap has a target price of ₹175 on SpiceJet shares.
"If it takes longer to resolve the Jet Airways issue, SpiceJet could well lease more planes (Jet Airways had a total of 84 Boeing 737 NGs)," SBICap added.
SpiceJet is the top pick for Elara Capital in the aviation sector. "We reiterate SpiceJet as our top pick in the aviation sector, due to little competition in regional routes and strong fleet order book. SpiceJet is better placed to hire outgoing Jet Airways pilots, as both carriers are flying similar Boeing-737 aircraft in domestic routes," the brokerage said in a recent note.
SpiceJet shares were up 7% at ₹142 in noon trade.
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