The share price of SpiceJet rallied over 13 percent on Thursday after the US Federal Aviation Administration (FAA) lifted its 20-month ban on Boeing 737 Max aircraft and cleared it for flying.
SpiceJet has 13 Boeing 737 Max planes in its fleet and is the sole operator of these planes in India after Jet Airways was grounded.
The stock rose as much as 13.6 percent to its day's high of Rs 75.40 per share. The stock has risen nearly 38 percent in just the last four sessions as the DGCA further eased restrictions and allowed airlines to sell seats up to 70 percent capacity from 60 percent earlier.
The MAX was grounded after two fatal crashes that killed 346 people within five months in 2018 and 2019 and led to a hailstorm of investigations.
US airlines can now start flying commercially once they have completed the FAA's requirements, though flights elsewhere will depend on approval from other regulators across the globe.
"Alongside the software and wiring changes, pilots will also need training. Besides, the approved changes have eliminated what caused these particular accidents," the FAA said.
However, the Indian regulator (DGCA) said that they are studying the FAA report and would not allow the plane to "return immediately" to the skies. The existing aircraft will need to be modified before going back into service, it added.
In the September quarter, SpiceJet significantly cut down its net loss despite travel restrictions and COVID‐19 affecting demand. On a standalone basis, the net loss for Q2FY21 reduced to Rs 112.6 crore as against Rs 462.6 crore in the same period last year. The decline in losses was attributed to a 60 percent reduction in expenditure along with a 157 percent year-on-year rise in revenue from the cargo business.
"Despite COVID‐19 continuing to pose serious operating challenges we have managed to significantly cut down our net loss in Q2 much like the previous quarter. The performance in Q2 is even more significant and special as this was a seasonally weak quarter when demand is at its lowest," said Ajay Singh, chairman and managing director (CMD), SpiceJet.