Spicejet shares gains 14 per cent after Boeing 737 MAX gets US FAA nod
Published On: Thursday, November 19, 2020 | By: Team KnowMyStock
Shares of budget airline SpiceJet gained as much as 13.6 % to hit a high of Rs 75.4 on the BSE on Thursday after the US Federal Aviation Administration gave clearance to fly Boeing 737 Max aircraft after two-years of grounding. The clearance was announced after a "comprehensive and methodical" 20-month review process, the regulator said. The regulators also said the clearance would not allow the plane to "return immediately" to the skies as the existing aircraft will need to be modified before going back into service, with changes to their design and will be ready to return to operations by the first quarter of 2021. With 13 of these aircraft grounded, SpiceJet has been in talks with Boeing for claims. In the second quarter, the airline has recognised Rs 138 crore of these claims as other income."SpiceJet can also receive compensation from Boeing for the 737 Max grounding, which could be in the range of Rs 1,000-1,200 crore," HSBC Global Research had said in a note on Wednesday.
Total income in Q2 stood at Rs 1,305 crore against Rs 3,074 crore in the same quarter last year
"Once 737 Max returns to operations, SpiceJet could start receiving incentives as part of the sales and lease back agreement
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