DGCA places SpiceJet under enhanced surveillance to ensure safety of operations

The Directorate General of Civil Aviation (DGCA) on Thursday placed low-cost carrier SpiceJet airline under enhanced surveillance with immediate effect after a special audit by the aviation regulator revealed certain deficiencies at the airline.

“In light of the past record and the special audit carried out in August 2024, SpiceJet has once again been placed under enhanced surveillance with immediate effect. This would entail increase in number of spot checks/ night surveillance with a view to ensure safety of operations,” the regulator said in a statement.

The aviation regulator had conduced a special audit of SpiceJet’s engineering facilities during 7-8 August after reports of cancellation of flights and financial stress being experienced by the airline.

This is not the first time that the cash-strapped SpiceJet has been put under enhanced surveillance by the regulator. In July 2022, DGCA had directed the airline to reduce its total number of flights by 50% for two months following repeated safety incidents. During this period, the airline was placed under intense scrutiny to ensure compliance with safety protocols. These restrictions were later lifted in October.

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Again, based on reports of financial stress and a series of technical glitches faced by the carrier during the previous year's monsoon season, the airline was placed under enhanced surveillance in July 2023 for around two weeks.

SpiceJet’s market share in India’s aviation sector has continued to drop this year—to 3.1% in July from 5.6% in January, as per the latest data from the DGCA. Over the past week, the airline has also cancelled multiple flights. In fact, the airline’s Dubai flights were disrupted over the past couple of days due to unpaid dues.

The airline’s market share had been declining even earlier—dropping to 14.9% in 2020, when covid hit India, from 17.4% in 2014.

SpiceJet has also delayed salaries for its employees and is fighting legal battles over unpaid dues to aircraft lessors, vendors and suppliers, and faces contempt notices from the Delhi High Court and the National Company Law Tribunal.

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SpiceJet’s plan to raise ₹3,000 crore through a qualified institutional placement of shares is its latest effort to shore up capital. Earlier, it completed a capital infusion of ₹744 crore by allotting shares and warrants on a preferential basis.

The airline’s spokesperson had told Mint last week that the company expects shareholder approval by 13 September to raise up to ₹3,000 crore.

“The entire exercise is slated for completion by 30 September. We have appointed top-tier merchant bankers to expedite the process and ensure success. This capital will be pivotal in driving our growth and expanding our fleet,” the spokesperson had added.

SpiceJet’s first-quarter consolidated net profit declined 20% from a year earlier to ₹158.2 crore. But that was an improvement from the March quarter’s ₹126.9 crore net profit, and the December quarter’s ₹299 crore net loss.

Recently, SpiceJet has been the least punctual among domestic airlines, with just around 52% of its flights taking off on time, as per 28 August data from the ministry of civil aviation.

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