Why SpiceJet’s stock nosedived after the September quarter results
SpiceJet Ltd’s shares faced turbulence on Thursday, falling 6% on BSE. In a seasonally weak quarter, the airline reported a loss of almost ₹463 crore, higher than the ₹328 crore loss that a Bloomberg poll of analysts was expecting.
However, year-on-year revenue growth at 51%, led by solid capacity expansion, was impressive.
What explains SpiceJet’s disappointing performance then? To begin with, cost pressures were back-breaking. Unabsorbed costs from the grounding of the Boeing 737 Max aircraft continue to haunt SpiceJet. Additionally, older aircraft that it had received from Jet Airways (India) Ltd, which shut operations earlier this year, added to cost pressures.
