SpiceJet says no plans to file for insolvency

The Gurugram-based carrier also said it has begun to revive 25 of its grounded fleet using its own money and a $50 million line of credit

Amid growing turbulence in the Indian aviation sector following the suspension of services by Go First, budget carrier SpiceJet on Thursday sought to dispel fears of bankruptcy saying the rumours regarding the company’s filing for insolvency is “completely baseless”.

“There is absolutely no question of filing for insolvency. Any rumour regarding the same is completely baseless,” said SpiceJet Chairman and Managing Director Ajay Singh.

Quashing the rumours of insolvency, Singh said the company is taking steps to revive its grounded fleet using the $50 million fund it received from the government's Emergency Credit Line Guarantee Scheme (ECLGS) and internal cash accruals.

“We are focussed firmly on reviving our grounded fleet and getting more and more planes back into the air. Work on this front has already begun and the company is using the $50 million ECLGS funds and our own cash,” Singh said in a statement.

Read | NCLT admits Go First's plea to initiate insolvency resolution

SpiceJet’s comment came just over a week after its competitor Go First grounded its flights and filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT).

SpiceJet and Go First are India’s oldest budget carriers. Go First, which was earlier named GoAir, started its operation in 2005. SpiceJet also began operation in the same year. IndiGo, which controls over 56 per cent (in 2022) share in India’s domestic air traffic, came into operation in 2006.

The speculations over SpiceJet going for insolvency proceedings rose after one of its lessors Aircastle (Ireland) Ltd recently filed a case in the National Company Law Tribunal (NCLT) seeking initiation of an insolvency process against the airline for non-payments of dues.

The NCLT earlier this week issued a notice to SpiceJet and the next hearing is scheduled for 17th May. Ireland-based Aircastle had filed the petition in the NCLT on April 28.

SpiceJet CMD sought to play down the company’s problems with its lessors, saying, “We have a great relationship with all our partners. Our lessors have supported us through the thick and thin and continue to do so and we are grateful for their support and confidence.”

On the possible spillover impact of Go First airline’s ongoing insolvency proceedings, SpiceJet noted in the statement: “We want to scotch any speculation that may have arisen due to the filing by another airline. The airline is firmly focussed on its business and remains in active talks with investors to raise funds.”