SpiceJet shares gain 5% on plans to buy 150 planes from Boeing and Airbus
Shares of SpiceJet gained over 5 per cent in trade on Monday after the airline’s chairman Ajay Singh said the company is in talks with Boeing and Airbus to buy more than 150 planes, predicting he would decide which manufacturer to place the order with by the end of March 2016.
The stock hit an intraday high of Rs 68.85, up 5.11 per cent on the Bombay Stock Exchange (BSE).
Such an investment would cap a remarkable turnaround for India’s second-biggest budget airline by market share, which came close to collapse late last year after running out of cash.
Co-founder Ajay Singh subsequently bought back into the airline, acquiring a controlling stake. SpiceJet has reported profits in the past three quarters, having made losses in the five preceding quarters.
Singh now wants to more than quadruple the carrier’s fleet from 41 aircraft at present.
“We are in the process of placing a large aircraft order; the airline will order in excess of 150 planes – we hope to do that in this financial year,” Singh said a news conference in Dubai. Its financial year will end in March.
“We’re looking at both Airbus and Boeing. The (Boeing 737) Max aircraft as well as the (Airbus A320) Neo. We have received offers from both of them,” Singh told Reuters.
Meanwhile, stock of SpiceJet skyrocketed 346 per cent in the past one year, which is against a meagre return of 2 per cent seen by the benchmark S&P BSE smallcap index during the same period.
G Chokkalingam, Founder, Equinomics Research & Advisory recommended to book profits in stocks of SpiceJet.
Read full article: Business Today
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