Dubai: Even as new airlines get ready to fly in India, SpiceJet, one of the older carriers, is not having such a good time of it. The low-cost operator received a show cause notice from the country’s aviation regulator last week, while its aircraft suffered several mid-air lapses over the last month and has many in the industry concerned about its future.
The airline, which came back from near bankruptcy in 2014, saw annual losses nearly triple to Rs10.29 billion in the last financial year compared to 2019 figures. SpiceJet, which recently settled a lawsuit over non-payment of dues to a Swiss MRO firm, has been put in the ‘cash-and-carry’ category by many of its suppliers – this means the carrier can buy spare parts only on immediate payment.
“Nobody wants to lend to SpiceJet, and they have gotten themselves into this really bad position,” said an industry source. Last year, Crisil Ratings withdrew its 'Crisil D' credit ratings after the company did not provide information essential to take a forward-looking view on its credit quality.
“A lot of the issues are because of pure maintenance mismanagement,” said the source. “The airline need a maintenance engineering guide to be proactive and fix problems pre-emptively.”
This could be an oversimplification of what’s happening at the airline. “SpiceJet has been on cash-and-carry for a while,” said Vinamra Longani, head of operations at Sarin & Co, an aviation law firm.
In a statement to ‘Gulf News’, SpiceJet called the recent incidents “isolated” and said that initial investigation did not indicate a specific maintenance issue in the airline’s fleet. “Preventive actions are formulated, implemented and audited frequently to ensure no recurrence of a similar nature occurs in the future,” the airline said.
“The fact that we have had the highest load factor among all domestic airlines shows we are the most preferred and trusted airline in the country. Our current occupancy rates continue to be the highest in the country.”
In May, SpiceJet delivered a load factor at around 89 per cent followed by Go First at 86.5 per cent, according to a DGCA’s report. It also showed that Indian carriers flew 12 miillion passengers on domestic routes in May compared to just 2.1 million in the same period a year earlier.
Multiple incidents
SpiceJet’s problems came to the regulator’s attention after a Delhi-Dubai flight was diverted to Karachi due to a malfunctioning indicator. On the same day, the airline’s Kandla-Mumbai flight got a cracked windshield during cruise. In June, a Delhi-Patna flight was thought to have caught fire after the Boeing 737-800 was seen with a trail of smoke.
On Monday, a SpiceJet flight (SG23) operating from Dubai to Madurai was delayed due to a last-minute technical issue. “Flight delays can happen with any airline - there has been no incident or a safety scare on this flight,” said the airline in a statement.
Due to these glitches and the DGCA’s notice, SpiceJet’s shares are down 44 per cent this year. Shares of Indigo, which is seeing some cancellations due to staff shortages, are down 16 per cent since the beginning of 2022.
