New Delhi, September 22: Once India’s second largest airline by market share, SpiceJet is the latest airline to face financial troubles, despite the government bailing out the company with a Emergency Credit Line Guarantee Scheme (ELGS) bailout of $15.67 million. According to reports, the company has been facing a major financial crush, with salaries to its employees delayed for the past three and a half months. Several of its flights have been cancelled or delayed due to operational reasons.
Amidst this, the company’s senior officials are awaiting another Rs.350 crore bailout from the government, hoping that its operations will normalize by October.
At a press conference, Civil Aviation Minister Ram Mohan Naidu has said that the government is closely monitoring SpiceJet’s operations and finances, with the DGCA ensuring that passenger safety is not compromised.
The airline has already paused flying to Chennai and other locations, as it faces a shortage of planes for operational reasons. The higher costs of airline turbine fuel (ATR) due to the disruptions in supplies from the Middle East has been the main reason for SpiceJet’s financial challenges, as it struggles with a declining market share and intense competition in the sector. A similar re-run of Kingfisher Airlines or Jet Airways challenges remains a constant fear, with the Civil Aviation Ministry keeping a close eye on the beleaguered carrier to prevent such issues.
