SpiceJet shares plunge 10% after two senior executives resign

Shares of SpiceJet Ltd tumbled as much as 9.8% in early trade on Tuesday to hit an intraday low of ₹54.60 apiece on the BSE, after airline's chief operating officer (COO) Arun Kashyap and chief commercial officer (CCO) Shilpa Bhatia reportedly resigned from the beleaguered airline. According to news reports, Kashyap and Bhatia are currently serving the notice period till March 31.

Following the development, the scrip opened lower at ₹60.57, as against the previous closing price of ₹60.58. At 9:40 am, the airline's share price was trading 4.32% lower at ₹57.96. This was in contrast to the broader BSE Sensex, which was up 385.77 points or 0.52% at 73,888.

The company's market capitalisation stood at ₹3,964.79 crore with more than 12.21 lakh shares exchanging hands on the BSE, as against the two-week average of 35.83 shares. The company hit a 52-week high of ₹77.50 on February 5 this year and a 52-week low of ₹22.65 on March 23 last year.

In the past six months and one year, the counter has given 43.14% and 64.54%, respectively in return.

According to reports, Kashyap and Bhatia are likely to start their own charter airline business. In 2023, Meenakshi Kashyap (wife of Arun Kashyap) and Ajay Bhatia (husband of Shilpa Bhatia) reportedly incorporated Sirius India Airlines Private Limited, whose future operations would have been carried out only with the consent of SpiceJet.

The development comes as the low-cost carrier continues to face financial crunch, legal woes and regulatory troubles. The Ajay Singh-led company is also resorting to cost-cutting measures such as laying off as many as 1,000 employees as it aims to achieve “profitable growth.”

"As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalisation, aimed at achieving profitable growth and positioning ourselves to capitalise on the opportunities in the Indian aviation industry. Through this initiative alone, we anticipate an annual saving of up to INR 100 crore," an airline spokesperson said last month.

Notably, SpiceJet is currently in the midst of a revival plan, having completed the first tranche of capital infusion amounting to ₹744 crore.

The Gurugram-headquartered airline has also settled a ₹250 crore dispute with Celestial Aviation, a subsidiary of AerCap, and a ₹413 crore with Echelon Ireland Madison One, last month. Last week, the company reached settlement terms with aircraft leasing firm, Cross Ocean Partners, resolving a dispute of about ₹93 crore.

Meanwhile, in February this year, the low-cost carrier submitted a joint bid for bankrupt no-frills carrier Go First. Singh submitted the bid in his personal capacity along with Busy Bee Airways Private Ltd. SpiceJet said its role as the operating partner for the new airline involves providing essential staff, services, and industry expertise. This collaboration is anticipated to generate synergies between the two carriers, leading to improved cost management, revenue growth, and a strengthened market position within the Indian aviation industry, the company said.