SpiceJet Ltd. shares experienced a significant jump on Thursday, rising 10% to reach Rs 12.32. This marks the fourth consecutive session of gains for the low-cost carrier, even though its stock remains down approximately 58.78% on a year-to-date basis.
New Aircraft Boost Capacity
The latest surge followed the airline's announcement regarding the induction of three Airbus A320 aircraft into its fleet through damp lease arrangements. All three planes have arrived in India and are slated to commence commercial operations later this week.
SpiceJet stated that these additional aircraft will bolster its network expansion strategies, enhancing connectivity across vital domestic routes. The damp lease model is expected to provide greater operational flexibility while delivering considerable cost efficiencies. Furthermore, the airline confirmed it is in advanced discussions with other lessors to acquire more aircraft in the coming months as part of its ongoing fleet augmentation program.
Debojo Maharshi, Chief Business Officer at SpiceJet, commented on the development. He noted that the induction of these three aircraft aligns with the airline's planned capacity expansion. "As demand continues to grow, these aircraft will help us add more flights on existing routes, improve connectivity and support the launch of new services," Maharshi stated. He added that the airline is "steadily building capacity ahead of the busy travel season" to offer passengers a wider choice of destinations and a reliable travel experience.
Market Experts Advise Caution
Despite the recent positive movement, several market experts maintain a cautious outlook on SpiceJet's stock. Ravi Singh, Chief Research Officer at Master Capital Services, highlighted the airline's ongoing challenges.
"SpiceJet is going through a really rough patch right now. They are facing hurdles from lawsuits, cash shortages, and a large number of grounded planes. While they keep dodging bankruptcy by raising fresh funds and striking last-minute deals with leasing companies, their actual day-to-day flying operations are struggling," Singh explained, describing the stock's trading pattern as that of a "highly volatile penny stock."
Echoing this sentiment, Kranthi Bathini, Equity Strategist at WealthMills Securities, suggested that the stock is suitable only for investors with a high-risk appetite, underscoring the inherent volatility and operational hurdles faced by the airline.