SpiceJet’s path to recovery: A tough, long climb to reclaim market share

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₹3,000 crore fund infusion to reclaim its spot in the skies as it seeks to emerge from an unending series of struggles that have weighed it down for several years. The airline, which had almost shut down in 2014 due to financial distress, expects to get its grounded aircraft up again as it raises money from multiple sources. But it still has to contend with multiple challenges, including legal hurdles, millions of dollars in unpaid dues, and stiffer competition that has eroded its market share.

On Friday, the Delhi High Court once again rebuked SpiceJet for using leased engines without paying rental dues. The court also pulled up the airline for making assurances despite lacking the funds to fulfill them. “You are using someone else’s property, and you can’t use it without paying the rent...

Which court allows you to use property without paying?," Justice Rajiv Shakdher remarked. Even so, SpiceJet is confident of a comeback, a decade since its troubles began. “Despite facing unprecedented challenges like the grounding of the Boeing 737 Max and the global covid-19 pandemic, which temporarily impacted our operations, SpiceJet is now poised for a robust comeback," said a spokesperson for the airline.

SpiceJet expects shareholder approval by 13 September to raise up to ₹3,000 crore ($357 million) via a qualified institutional placement (QIP) of new equity shares, the spokesperson added. “The entire exercise is slated for completion by 30 September. We have appointed top-tier merchant bankers to expedite the process and ensure success.