The carrier is experiencing financial difficulties and stiff competition from its rivals.
A SpiceJet 737 (Photo: Jane Mejdahl [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)])
India’s SpiceJet received a financial lifeline again from Carlyle Aviation. According to Reuters, the aircraft lessor wrote off $40.2 million of the airline’s lease arrears and converted $30 million into equity. As of now, the firm holds a roughly 6% stake and will “significantly” increase it as a result. Carlyle also converted part of its debt to the airline into equity in August 2023.
SpiceJet operates around 21 aircraft and its market share is below 4%. Over 30 aircraft have been grounded over legal disputes. Some aircraft lessors even requested the aviation regulator to de-register the airline’s aircraft. It currently owes 3,700 Crore ($442 million) to lessors.
Meanwhile, the no-frills airline faces another setback, The Delhi High Court has refused involvement in the dispute between SpiceJet and two French lessors demanding three engines be grounded. The decision could put a strain on the airline, potentially grounding two additional jets in the future.
According to the airline, SpiceJet reported a profit of 150 Crore with the highest domestic load factor of 91% for the first quarter of 2024-25. However, the ongoing financial difficulties resulted in cancelling flights in Dubai last month.
The new investment comes a week after the decision to place 150 cabin crew members on furlough for three months.
“In response to the current lean travel season and the reduced fleet size, with the long-term stability of the organization in mind,” the airline said in a statement to India TV News.
In the meantime, the Directorate General of Civil Aviation (DGCA), the country’s aviation regulator, opted to place the airline under so-called “enhanced surveillance.”
“In light of the past record and the special audit carried out in August 2024, SpiceJet has once again been placed under enhanced surveillance with immediate effect,” DGCA said.
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