No question of filing insolvency, says SpiceJet amid Go First crisis

SpiceJet on Thursday said there is absolutely no question of filing for insolvency as the low-cost carrier has initiated the process of reviving its grounded fleet with the $50 million funds received from the government's Emergency Credit Line Guarantee Scheme (ECLGS) and internal cash accruals.

The statement by the no-frills carrier comes a day after the National Company Law Tribunal (NCLT) admitted Go First's insolvency plea, taking over the management of the airline.

"In view of the recent developments in the Indian aviation market, the airline has categorically stated that it has no plans whatsoever to file for insolvency. We want to scotch any speculation that may have arisen due to the filing by another airline. The airline is firmly focussed on its business and remains in active talks with investors to raise funds," SpiceJet says in a statement.

"There is absolutely no question of filing for insolvency. Any rumour regarding the same is completely baseless. We are focussed firmly on reviving our grounded fleet and getting more and more planes back into the air. Work on this front has already begun and the company is using the $50 million ECLGS funds and our own cash," says Ajay Singh, chairman and managing director, SpiceJet.

"We have a great relationship with all our partners. Our lessors have supported us through the thick and thin and continue to do so and we are grateful for their support and confidence," Singh adds.

SpiceJet had last week announced plans to revive 25 grounded aircraft that will help it capitalise and make the most of the upcoming peak travel season.

The low-cost airline's market share stood at 6.9% during the January-March quarter, marginally behind rival Go First which cornered a market share of 7.8% for the first three months of 2023.

SpiceJet recently restructured over $100 million outstanding dues to Carlyle Aviation Partner into equity shares and compulsorily convertible debentures (CCDs). Carlyle Aviation, an aircraft lessor, is the commercial aviation investment and servicing arm of private equity giant Carlyle. Following the transaction, Carlyle Aviation will hold over 7.5% equity stake in the airline.

In April, SpiceJet hived off its cargo and logistics division 'SpiceXpress' into a separate entity, SpiceXpress and Logistics Pvt Ltd, paving the way for SpiceXpress to raise funds independently.

India's aviation regulator, the Directorate General of Civil Aviation (DGCA), had last year introduced curbs on SpiceJet, restricting the number of departures to 50% of the number of departures approved under summer schedule 2022 owing to repeated 'safety incidents'. The Gurugram-based airline operates a fleet of Boeing 737s and Q-400s, and is one of the country's largest regional players operating multiple daily flights under the Regional Connectivity Scheme.