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SpiceJet stock flies 4% after settling dispute, acquiring 13 Q400 Aircrafts

SpiceJet share price jumped up to 4.1 per cent at Rs 55.87 per share on the BSE in Thursday's intraday deals

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SI Reporter New Delhi

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SpiceJet share price jumped up to 4.1 per cent at Rs 55.87 per share on the BSE in Thursday’s intraday deals after the company settled a dispute with Export Development Canada (EDC) and saved $68.3 million. 
 
The company on Wednesday said that it has fully settled a $90.8 million (Rs 763 crore) dispute with EDC for a total of $22.5 million, now paid in full by the airline. This resolution resulted in a saving of $68.3 million for the airline(Rs 574 crore). Further, as per the terms of the agreement, SpiceJet has acquired full ownership of 13 EDC‐ financed Q400 aircraft. 
 
 
SpiceJet stated that the transfer of ownership of these 13 planes will result in a substantial reduction in operational costs, relieving SpiceJet from the obligation of monthly rental payments for these aircraft and further reinforcing the airline’s financial stability.
 
“The agreement represents one of the largest settlements in SpiceJet’s history, strengthening the airline’s fiscal position, eliminating a significant liability from its balance sheet and paving the way for sustained growth and operational efficiency,” the company said in a statement.
 
With the aircraft the airline now plans to launch additional flights on regional and UDAN routes. Starting October 27, 2024, the airline has begun operating several new routes using the Q400, including Delhi‐Amritsar‐Delhi, Guwahati‐Patna‐Guwahati, Kolkata‐ Patna‐Kolkata, Delhi‐Patna‐Delhi, and Delhi‐Darbhanga‐Delhi, it said. 
 
Recently, SpiceJet also introduced services on the Shivamogga‐Chennai, Shivamogga‐Hyderabad, and Chennai‐ Kochi sectors with the same aircraft. SpiceJet plans to roll out another 18 flights in phases as more Q400 aircraft return to service.
 
“This resolution allows us to move forward with a strengthened balance sheet and focus on getting our Q400 aircraft back into service as quickly as possible. We are excited to expand our regional operations and enhance connectivity across key routes, including those under the UDAN scheme, with our revitalised fleet,” said Ajay Singh, chairman and managing director, SpiceJet. 

SpiceJet share price history

The company’s stock has outperformed the market year to date as it has fallen 8 per cent, while gaining 47.9 per cent in the last one year. In comparison BSE Sensex has risen 7.2 per cent year to date and 19.3 per cent in a year. 
 
The company has a total market capitalisation of Rs 7,085.16 crore. At 12:28 PM; the shares of the company were trading 3.82 per cent higher at Rs 55.68 a piece. By comparison, the BSE Sensex was down 0.15 per cent at 77,574.18 level. 
 

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First Published: Nov 14 2024 | 12:33 PM IST

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