The shares of domestic budget airline SpiceJet soared by over 15% on Thursday to an eight-month high after the Federal Aviation Administration (FAA) in the US cleared Boeing's 737 Max aircraft to resume flying. This comes nearly two years after the aircraft was banned post two fatal crashes. SpiceJet is currently the only airline in the country to have 737 Max aircraft on its fleet, which it has 13 of. Jet Airways also had five of these aircraft before it suspended operations.
This announcement comes as a relief for the budget carrier. Investors too seem to be enthused by the announcement with the stock trading 14.85% up at Rs 76.20 on the Bombay Stock Exchange at the time of writing. On the National Stock Exchange, the stock was up 15.02% at Rs 76.20. The last time SpiceJetâs share price went above this was on March 3, 2020. With this rally on Thursday, which follows stronger-than-expected Q2 results, the stock has surged by nearly 40% on the BSE in the past week.
Meanwhile, the aviation regulator in India has reportedly said that it is waiting for formal communication from the FAA before it can allow 737 Max aircraft to resume flying again.
While reporting its July-September quarter results, SpiceJet said that despite being grounded, the airline was incurring costs on these aircraft. It was also hoping that the return the 737 Max would aid in the recovery of the airline.
âFY2020 posed multiple unprecedented challenges such as the COVIDâ19 pandemic and the worldâwide grounding of the Boeing 737 MAX which led to the overnight grounding of SpiceJetâs MAX fleet. On the grounded Boeing 737 MAX aircraft, the Company continues to incur various costs with respect to these aircraft,â the airline said in a statement at the time.
Clearing the decks for the aircraft to fly again, the American regulator said that globally, regulators have indicated that Boeing's design changes, together with the changes to crew procedures and training enhancements, will give them the confidence to validate the aircraft as safe to fly in their respective countries and regions.
The announcement also comes as a major relief to Boeing. In a statement, the aircraft maker said that the move will allow airlines that are under the FAA's jurisdiction, including those in the US, to take the steps necessary to resume service and Boeing to begin making deliveries.
"We will never forget the lives lost in the two tragic accidents that led to the decision to suspend operations. These events and the lessons we have learned as a result have reshaped our company and further focused our attention on our core values of safety, quality and integrity,â David Calhoun, chief executive officer of The Boeing Company said.
Through the past 20 months, Boeing said it worked closely with airlines, providing them with detailed recommendations regarding long-term storage and ensuring their inputs were part of the effort to safely return the aeroplanes to service.
The company added that an Airworthiness Directive issued by the FAA spells out the requirements that must be met before US carriers can resume service, including installing software enhancements, completing wire separation modifications, conducting pilot training and accomplishing thorough de-preservation activities that will ensure the airplanes are ready for service.
"The FAA's directive is an important milestone," said Stan Deal, president and chief executive officer of Boeing Commercial Airplanes. "We will continue to work with regulators around the world and our customers to return the airplane back into service worldwide."
With IANS inputs