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Thanks, it helped me with the problem! But now my player is not staying still on the ground. And also when I move, it kind of lags and does show a snappy movement, even though I am using a fixed update.

It sounds like you need to apply gravity to the ship and/or increase its mass.  Or, if the ship never needs to move up and down at all, you could just reset its Y position every frame.

As for jittery movement, if you are applying a force or some other physics function, you should do it in FixedUpdate.  If you are applying a regular translation or rotation or doing anything else, you should do it in Update.