SpiceJet Shares Fall After Issue Of Three-Month Furlough For 150 Cabin Crew

Shares of SpiceJet Ltd. fell over 6% on Friday after the troubled airline issued a temporary leave of absence to 150 cabin crew members for three months amid an ongoing financial crisis.

The airline suspended the crew members with "the aim of ensuring long-term stability", an official spokesperson said. "As we work toward enhancing our fleet following the upcoming Qualified Institutional Placement, we look forward to welcoming our crew members back to active duty," the spokesperson said.

Furloughs are temporary, forced leaves of absence where employees retain their jobs but are unpaid. Employees keep their benefits during furloughs and anticipate a return to work within a certain time period.

The latest trouble comes after the airline came under regulatory scrutiny for flight cancellations and operational deficiencies.

On Thursday, passengers of SpiceJet were barred from boarding a flight at Dubai airport due to the airline's failure to settle outstanding dues, according to sources cited by NDTV Profit.

SpiceJet had approved a plan in July to raise up to Rs 3,000 crore through QIP, subject to shareholder approval and regulatory clearances, as part of its efforts to strengthen its financial position.

Shares of SpiceJet fell as much as 6.37% to Rs 62.01 apiece on the NSE. It was trading 5.57% lower at Rs 62.5 apiece, compared to a 0.77% advance in the benchmark BSE Sensex as of 9:41 a.m.

The stock has risen 97% during the last 12 months and 4.7% on a year-to-date basis. The total traded volume so far in the day stood at 5.5 times its 30-day average. The relative strength index was at 55.

One out of the four analysts tracking the company has a 'buy' rating on the stock, two suggest a 'hold' and another one recommends a 'hold', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 19%.