SpiceJet under the microscope - DGCA boosts scrutiny amid financial turmoil
Airline’s operational and financial challenges trigger immediate crackdown following latest audit insights
Dubai: India's Directorate General of Civil Aviation (DGCA) has swiftly placed SpiceJet under 'enhanced surveillance' after a special audit revealed serious flaws in the airline's engineering facilities.
Spot checks and financial woes
The move follows a troubled year for SpiceJet, which faced intensified inspections in 2022 and 2023 due to operational and financial issues. Recent findings have cemented the need for stricter oversight.
Dubai disruptions highlight trouble
Recent disruptions at Dubai airport, where passengers were barred from boarding over unpaid fees, reflect the airline's ongoing financial struggles. SpiceJet attributed cancellations to "operational reasons" and has rebooked or refunded affected travellers.
Financial strain and recovery efforts
According to reports in Indian media, SpiceJet reported a 19.65% drop in profit for the June quarter, down to Rs 158.75 crore. Despite a 14.15% revenue decline, the airline showed some recovery with an operating profit of Rs 393 crore and an EBITDAR of Rs 650 crore.
Capital raise for future stability
To address financial instability, SpiceJet is raising Rs 3,000 crore through a Qualified Institutional Placement (QIP), set to conclude by September 2024. This move is critical for the airline's continued operation and growth.
Market strength amid challenges
Despite financial difficulties, SpiceJet boasts a leading 91% domestic load factor, showcasing its strong market position and operational efficiency during these challenging times.
The DGCA’s intensified oversight aims to safeguard safety and stabilise operations as SpiceJet navigates through its current hurdles.