Shares of India’s SpiceJet fell a day after the country’s aviation regulator halved its allowed capacity over several safety issues.
The airline’s stock fell as much as 9.3% early Thursday before paring some losses to be 6% down.
The Directorate General of Civil Aviation (DGCA) ordered the budget carrier to slash its approved fleet to 50% of usual capacity for eight weeks and said it would be subject to “enhanced surveillance”.
Earlier this month the DGCA issued a warning notice to SpiceJet after a review of recent incidents by the watchdog showed “poor internal safety oversight and inadequate maintenance actions”.
A review of several incidents involving SpiceJet’s planes since April 1 showed that “the aircraft either turned back to its originating station or continued landing to the destination with degraded safety margins”, the regulator said.
“The review transpires that poor internal safety oversight and inadequate maintenance actions (as most of the incidents are related to either component failure or system related failure) has resulted in degradation of the safety margins.”
The airline has been given three weeks to respond to the regulator’s warning notice before any action is taken. The letter was made public by India’s civil aviation ministry on Twitter on Wednesday.
SpiceJet did not immediately respond to a request for comment.
- Reuters, with additional editing by George Russell