Cash-strapped low-cost carrier SpiceJet said on Wednesday that it would use emergency funds from the government to bring 25 of its grounded aircraft back into service. The announcement came a day after another low-cost carrier, Go First, filed for insolvency, blaming faulty engines for the grounding of about half of its fleet.
SpiceJet said it had already mobilised around Rs 400 crore, toward getting its grounded fleet back in the air. It said it would draw funds from the government's Emergency Credit Line Guarantee Scheme (ECLGS), which was set up to help businesses cope with the impact of the coronavirus pandemic.
"We are meticulously working towards a return to service of our grounded fleet back in the air soon," Ajay Singh, the chairman and managing director of SpiceJet, said in a statement. "The Majority of the ECLGS funding received by the airline would be utilised for the same, which will help us capitalize and make the most of the upcoming peak travel season."
In February, SpiceJet had said it will consider options to raise fresh capital by issuing securities to qualified institutional buyers amid a string of quarterly losses and dwindling cash reserves.
The company's market share plunged to a fiscal year low of 6.4 per cent, down from 12.7 per cent in March 2018, air traffic data from the aviation regulator for March showed. Rival IndiGo, in stark contrast, saw a sequential increase in market share to 56.8 per cent, marking a six-month-high.
In a sign of the fierce competition in a sector dominated by IndiGo and the recent merger of Air India and Vistara under the Tata group, Go First filed for insolvency on Tuesday, marking the first major airline collapse in India since Jet Airways filed for bankruptcy in 2019.
AdvertisementIn a statement, Go First said its filing followed a refusal by Pratt & Whitney, the exclusive engine supplier for the airline's Airbus A320neo aircraft fleet, to comply with an arbitration order to release spare leased engines that would have allowed the airline to return to full operations.
"The government of India has been assisting the airline in every possible manner," Civil Aviation Minister Jyotiraditya Scindia said in a statement. "The issue has also been taken up with the stakeholders involved."
