SpiceJet share price extends 6-days losing streak, dips 19% today; here’s what investors should know

Share price of low-cost carrier SpiceJet nosedived on Tuesday hitting a fresh 52-week low. Overall, the stock has dived by a little over 19% on BSE. SpiceJet has been in a conundrum of insolvency proceeding by the lessor, losing market share, grounded aircraft, and being cash-trapped. And despite the troubled-days, SpiceJet is celebrating its 18 glorious years of flying high in the Indian skies.

At the time of writing, SpiceJet share price traded at ₹24.18 apiece down by 13.9% on BSE. The stock dropped by 19.31% with a new 52-week low of ₹22.65 apiece on the exchange.

In the previous session, SpiceJet's stock stood at ₹28.07 apiece.

The airline's stock emerged as the top underperformer on the exchange BSE on Tuesday. This is despite SpiceJet assuring investors by planning to bring back its grounded planes starting next month. Not just that SpiceJet plans to start two new flights, and has also launched a mega sale for customers. It is all part of its 18th year anniversary which is celebrated on May 23rd.

The reason behind the drop in SpiceJet's share price is that traders remained jittery about the cash-strapped airline.

On the latest drop in SpiceJet's stock, Manish Chowdhury Head of Research Stoxbox said, "Shares of SpiceJet fell for the sixth consecutive day today as markets remained jittery over the fate of the cash-strapped airline."

Read here: Go First must show us it can sustain ops: Thomas Cook

He added, "With its competitor GoFirst filing for insolvency earlier this month, investors fear that the airline’s woes might worsen as lessors push the company to clear its dues or take a legal route against the company amid increased scrutiny about its strained finances and operations."

Also, he said, "With the Indian aviation industry having a tumultuous past, we feel that the industry is slowly moving towards a quasi-duopoly structure with InterGlobe Aviation (Indigo) on one side and Tata Group-controlled airlines (Air India, Vistara, and Air Asia) on the other."

SpiceJet share price has been under pressure throughout the current year so far. In 5 trading sessions, the airline's stock has dipped by at least 19.7% on BSE, while its monthly drop is over 24.4%. Year-to-date, SpiceJet's stock has plummeted by nearly 38% on the exchange.

On Tuesday, SpiceJet said, it plans to to bring 25 of its grounded planes back into service. Also, the airline is targeting the return of four of its grounded aircraft, two Boeing 737s, and two Q400s, by June 15.

More grounded planes are aimed to become operational in the following weeks.

Also, SpiceJet announced its plan to start a slew of flights including two international UDAN flights on the Agartala-Chattogram-Agartala and Imphal-Mandalay-Imphal sectors by June end. 

Further, the airline looks to launch a new UDAN flight on the Kolkata-Tezpur-Kolkata sector and restart Kolkata-Gwalior-Kolkata and Jammu-Gwalior-Jammu UDAN flights. Additionally, the airline will also launch flights on Kolkata-Agartala-Kolkata and Kolkata-Imphal-Kolkata sectors and restart flights on the Kolkata-Chattogram-Kolkata sector.

Read here: SpiceJet announces cheaper airfares to mark 18th anniversary. Details here

Coming to its mega sale, SpiceJet announced a special offer with one-way domestic fares starting at ₹1818/- on select routes such as Bengaluru-Goa and Mumbai-Goa. The sale offer is valid for bookings made between 23rd and 28th May 2023. The travel period for bookings under the offer is between 1st July and 30th March 2024.

On the anniversary, Ajay Singh, Chairman and Managing Director, of SpiceJet, said, “SpiceJet has become a truly inseparable part of people’s lives and has made an unbreakable bond with our passengers and we are immensely proud of this achievement."

Singh added, "Our 18th anniversary marks the beginning of a new era for us with renewed hope and opportunities. I am grateful to all our passengers and partners for having unflinching faith in us, which gives us strength to rise above challenges.”

SpiceJet's first commercial flight took off in Indian skies on May 23, 2005 from Delhi to Ahmedabad.

In less than two decades, SpiceJet is now struggling to retain its market share and float in the competition while facing liquidity crunch. In April 2023, both SpiceJet and Go First's market share dipped to 5.8% and 6.4% compared to 6.4% and 6.9% in March this year.

After Go First filed for bankruptcy due to grounded flights and illiquidity in its system, SpiceJet also faced insolvency after lessor Aircastle moved to NCLT against the Gurgaon-based budget airline over unpaid dues.

The bankruptcy tribunal has directed SpiceJet and Aircastle to explore settlement options. The next hearing of the lessor's insolvency proceedings against SpiceJet will be on May 25, as per reports.

SpiceJet is yet to announce its fourth-quarter earnings for FY23.

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