SpiceJet Plans to Get All Grounded Planes Back in the Air with ₹400 Crore Boost

SpiceJet, boosted by a recent ₹3,000 crore investment, has informed the Directorate General of Civil Aviation (DGCA) that it plans to return all its grounded planes to service within the next 18 to 24 months. The airline has set aside ₹400 crore for spare parts, maintenance, and engineering to support this effort. Additionally, SpiceJet will wet-lease aircraft, meaning it will lease planes along with the crews to quickly increase its capacity.

According to reports, SpiceJet aims to have seven grounded aircraft back in the air by the end of this year. This development comes as the DGCA finalizes the winter flight schedule, set to take effect at the end of October.

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SpiceJet’s shares rose by 6.5% to ₹66.90 on the BSE Sensex during early trading, reaching a high of ₹67.20 for the day.

Before securing the recent funding, over half of SpiceJet’s fleet was grounded. As of June 30, 2024, 36 out of 64 planes were not operational, with only a few of the 28 airworthy planes actively flying. The airline is working quickly to change that, aiming to grow its fleet to 100 aircraft by the end of 2026.

The airline recently announced plans to have 10 more planes operational by the end of November. This will be achieved by leasing seven new aircraft and bringing three previously grounded planes back into service. Agreements for the leased planes have already been signed, with two planes already arriving in India.

The fleet expansion follows SpiceJet’s successful Qualified Institutional Placement (QIP), which raised ₹3,000 crore. The airline also expects an additional ₹736 crore from a previous funding round, enhancing its financial stability and growth potential.

Ajay Singh, SpiceJet’s Chairman and Managing Director, emphasized that this fleet expansion is crucial to meet the growing demand for air travel and improve operational efficiency. He stressed the importance of maintaining competition in India’s aviation sector, which is at risk of becoming a duopoly led by IndiGo and Air India.

With strong demand, improved yields, and lower fuel prices, the current market conditions are favorable for the airline industry. SpiceJet is prepared to leverage its resources, including airport slots and maintenance infrastructure, to return to a stronger position in the market. Singh noted that the airline has faced challenges due to events like the grounding of the Boeing 737 Max and the COVID-19 pandemic but is ready to rebuild its fleet.