While Air India & IndiGo are increasing their capacity and expanding their network, other players including Go First and SpiceJet are struggling to stay afloat. Add to that, the revival of Jet Airways looks unlikely.
SpiceJet has posted losses after losses for the last few years. From Rs 934 crores in FY20, its losses climbed to 1,725 crores.
And to make matters worse the Supreme Court has ordered the airline to pay Rs 380 crores to Kalanithi Maran as interest on the 2018 arbitral award.
But that's not the only headache for spicejet. Less liquidity led to delayed payments to vendors and now three lessors have moved the national company law tribunal seeking recovery of dues.
Important to point out that majority of SpiceJet's fleet is leased so non-payment to lessors may result in lessors taking back their planes. As of now, according to a fleet tracking site, the airline has 30 of the 61 planes on ground. This means half of its fleet is not operational.
When you are not flying enough planes, you are not generating enough money to run operations. The airline's domestic market share is a reflection of its status. The airline fell from 10 percent maret share in May 2022 to 5.4 percent in May this year.
Go First is grounded since early May, Resolution Professional has invited bids from potential buyers and airline is yet to receive DGCA's nod to restart operations. Of the 54 planes only 26 are in a reday-to-fly condition. The process is more complicated than it looks. Lessors say Go First doesn't have valid leases to fly their aircraft so fleet availability is a question. Then engine supplier Pratt & Whitney hasn't shared any specific timeline to deliver engines.
Lenders for the first time have sought liquidation of Jet Airways expressing frustration at the delays caused by the winning bidder Jalan-Klarock Consortium. JKC hasn't paid any money to creditors or workmen so far.
The consortium in June 2021 had promised to pay Rs 380 crores to lenders and Rs 52 crores to workmen to take ownership of the airline. The airline doesn't have an Air Operator's Certificate anymore, neither does it have the required manpower.
11/07/2023 Madeeha Mujawar/CNBC TV18
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