Jet Airways shares fall over 31% day after airline announces temporary suspension of operations
The shares of rival airline SpiceJet rose by 2.68% on the BSE.
Jet Airways shares crashed at the National Stock Exchange on Thursday, closing 31.08% down at Rs 165.75 per share. The airline had announced on Wednesday that it was temporarily suspending all operations after its lenders failed to agree on funding.
On the other hand, the shares of rival airline SpiceJet rose by 2.68% on the BSE, as investors rushed to buy stocks in the private carrier. Ajay Singh, SpiceJet’s chairperson and managing director, had said on Wednesday that the airline will try to minimise inconvenience caused to passengers by the lack of flight options. SpiceJet plans to add 27 planes over the next two weeks, Reuters reported.
In a statement early on Thursday, Jet Airways’ lenders, led by the State Bank of India, said they were “reasonably hopeful” that the bidding process will be able to determine “fair value of the enterprise in a transparent manner”. “The lenders after due deliberations decided that the best way forward for the survival of Jet Airways is to get the binding bids from potential investors who have expressed EOI [expressions of interest] and have been issued bid documents on 16th April,” the lenders said. “Lenders are reasonably hopeful that the bid process is likely to be successful in determining fair value of the enterprise in a transparent manner.”
The Ministry of Civil Aviation on Wednesday said it will support the resolution process within the existing regulatory framework. The ministry said the Directorate General of Civil Aviation and other regulators are monitoring the situation carefully to ensure that all existing rules regarding refunds, cancellations, and alternate bookings are followed strictly.