Grounded Jet Airways stock rallies 14% on Hinduja Group stake buy buzz

SpiceJet, which has taken 15 of Jet's 737 on lease, shed 2.24% to close the day at Rs 126.55 on the BSE

The Jet Airways stock rallied 14 per cent on Tuesday after the Hinduja Group confirmed its interest in the airline. Jet Airways had closed operations on April 17, and its stock has slumped following a spate of senior-level exits and repossession of aircraft.

Jet shares closed the day at Rs 150.75 apiece on the BSE, even as the benchmark Sensex fell 1 per cent. The carrier’s stock has slipped 8 per cent this month, and 45 per cent since January.

A Hinduja Group spokesperson said the group was evaluating the opportunity to invest in the airline. It is carrying out its due diligence at present. Group executives are also expected to travel to Abu Dhabi on Thursday to meet senior officials of Jet’s strategic partner Etihad Airways. 

In another development, the SpiceJet stock shed 2.24 per cent to close at Rs 126.55 on the BSE. The carrier was quick to seize the opportunity presented by Jet's grounding, and has taken 15 of Jet's Boeing 737 aircraft on lease. However, SpiceJet's stock has come under pressure this month. Safety issues surrounding the grounded Boeing 737 Max is said to be a major factor. The stock has declined over 7 per cent in May so far.

Last month, Boeing said it had completed development of the updated software for the 737 Max, along with simulator tests and trial flights. The aircraft manufacturer added that it has flown the aircraft with the updated software for more than 360 hours on 207 flights, and had sought approval from the US Federal Aviation Administration for rectifications.

Yet, the issue is far from being resolved. A media report indicated that the 737 Max simulator has flaws and was unable to rectify the conditions that had caused the two deadly crashes. Boeing is working on the issues, the report added.