SpiceJet, which had a fleet of 74 planes in 2019, is currently operating around 20 aircraft.
| Photo Credit: Reuters

SpiceJet promoter and chairman Ajay Singh may offload more than 10% stake in the struggling carrier as part of the latest funding round that is expected to close by the end of September, according to sources.

The budget carrier — which is grappling with multiple woes, including financial challenges, legal battles and grounding of aircraft — is looking to raise money that will help it meet various obligations.

Also read | SpiceJet vs IndiGo: How pandemic set the two airlines on diverging paths

One of the sources said that Mr. Singh could offload up to a 15% stake in the airline if certain conditions are conducive.

Mr. Singh, who is the Chairman and Managing Director, would be offloading around 10% shareholding in the airline and the quantum could go up, the second source said.

For the proposed QIP (Qualified Institutional Placement), there is already a commitment for up to ₹2,000 crore and the airline is in discussions with potential investors. Meetings with investors have been held in India and overseas, the sources in the know said.

There was no official comment from SpiceJet.

The funding round is expected to be completed by the end of September.

At the end of June 2024, the promoter group had a little over 47% stake in the carrier, as per data available on the BSE.

SpiceJet, which had a fleet of 74 planes in 2019, is currently operating around 20 aircraft.

On Friday, the airline said it plans to mop up ₹3,200 crore through QIP, warrants and capital infusion by the promoter, the airline said in a presentation on Friday.

The funds will be utilised to take back the grounded fleet in operations, liability settlement, new fleet induction and other general purposes.

“Spicejet plans to raise Rs 2,500 crore through QIP and Rs 736 crore through previous warrants and promoter infusion, the airline said in an investor presentation,” it had said in the presentation to investors.

In January, SpiceJet could raise only ₹1,060 crore through preferential issues against its ₹2,250 crore funding plan that was announced in December 2023.

Image used for representative purpose only.
| Photo Credit: Reuters

Cash-strapped domestic carrier Spicejet plans to raise ₹3,200 crore through QIP, warrants and capital infusion by the promoter, the airline said in a presentation on Friday (September 6, 2024).

The funds will be utilised in taking back the grounded fleet in operations, liability settlement, new fleet induction and other general purposes, SpiceJet in the presentations.

“Spicejet plan to raise ₹2,500 crore through QIP and ₹736 crore through Previous Warrants and promoter infusion, the airline said in an investor presentation,” it said in a corporate presentation to investors ahead of its proposed capital infusion.

The proposed funds raised are subject to shareholders’ approval.

Ajay Singh-promoted SpiceJet had earlier in January this year, could raise only ₹1,060 crore through preferential issues against its ₹2,250 crore funding plan announced in December last year.

The airline attributed factors like reduction in fleet, and subsequent grounding, higher cost of working capital, escalating fixed costs, fixed rentals at airports, and outstanding statutory dues as the factors for its current problem.

According to the presentation, its operational fleet reduced to 28 planes in 2024 against 74 aircraft in 2019, while 36 aircraft remained on the ground due to the funding issue.

However, according to the live aircraft fleet tracking website, Planespotter.net, it had only 20 aircraft in operations as of September 5 and 38 on the ground.

It may also be noted that several of these aircraft are out of operation due to SpiceJet’s lessors and other vendors taking the airline to court for non-payment.

It also said that ₹3,700 crore dues are to be paid to the lessor, engineering & EDC liabilities, leading to the grounding of aircraft and ₹650 crore outstanding statutory dues.

SpiceJet also said that as the turnaround strategy, ungrounding and expansion of the fleet and enhanced presence on profitable routes, it will also focus on ancillary revenue and cargo, among others.

Shares of SpiceJet on Friday morning tumbled over 6%. File
| Photo Credit: Reuters

Shares of SpiceJet on Friday (August 30, 2024) morning tumbled over 6% after aviation watchdog Directorate General of Civil Aviation (DGCA) decided to place the crisis-hit firm under enhanced surveillance.

The stock tanked 6.38% to ₹62 on the BSE after a weak beginning.

DGCA on Thursday decided to place SpiceJet under enhanced surveillance that will entail increased spot checks and night surveillance to ensure safety of the airline’s operations.

Also Read: SpiceJet plans to lay off 1,000 people

Based on reports of cancellation of flights and financial stress being experienced by SpiceJet, DGCA said it conducted a special audit of the airline’s engineering facilities on August 7 and 8 and certain deficiencies were found during the audit.

“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.” DGCA said in a release.

“This would entail an increase in the number of spot checks/night surveillance with a view to ensure safety of operations,” the statement added.

In 2023 also, the regulator had placed SpiceJet under enhanced surveillance.

The no-frills carrier has been grappling with multiple headwinds, including financial and legal woes, and is also in the process of raising funds.

New Delhi:

Facing financial headwinds, SpiceJet has decided to furlough 150 cabin crew members for three months.

The budget carrier is operating with a reduced number of planes amid financial, legal and lessor woes. Currently, it has an operational fleet of around 22 aircraft.

A total of 150 cabin crew members will be sent on leave without pay for three months, an airline spokesperson said on Thursday.

Earlier in the day, aviation regulator DGCA said the airline has been placed under enhanced surveillance.

“SpiceJet has made the difficult decision to temporarily place 150 cabin crew members on furlough for three months.

“This step has been taken in response to the current lean travel season and the reduced fleet size, with the long-term stability of the organisation in mind,” the spokesperson said in a statement.

During this furlough period, the spokesperson said the cabin crew members will continue to retain their status as employees of SpiceJet, with all health benefits and earned leave intact.

The airline is looking to raise funds to boost its financials.

“As we work toward enhancing our fleet following the upcoming qualified institutional placement (QIP), we look forward to welcoming our crew members back to active duty,” the spokesperson said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Mumbai airport issued an advisory to SpiceJet’s passengers about a likely disruption to their flights and later withdrawn. File
| Photo Credit: The Hindu

“SpiceJet’s passengers at Dubai airport on Thursday (August 29, 2024) were barred from checking-in over the airline’s failure to clear airport dues,” said multiple industry sources.

This forced the airline to operate empty flights out of Dubai. It is learnt that the airline’s passengers departing from Dubai have been facing similar issues over the past week.

Also Read: SpiceJet Q1 profit contracts 27% to ₹149 crore

SpiceJet is yet to respond to a request for comment on the development.

“We are monitoring SpiceJet. They are going through a challenging time,” said a senior official of the Ministry of Civil Aviation.

On August 12, 2024, Mumbai airport also issued an advisory to SpiceJet’s passengers about a likely disruption to their flights. The advisory was later withdrawn.

Also Read: Government announces simplified norms for seaplanes

Airlines employees have also been upset over delayed salaries, which have not been paid for two months. These also include pilots and cabin crew. In Guwahati, SpiceJet’s loaders, cleaners and drivers refused to report for work and held a demonstration outside the airport because of non-payment of salaries.

Also Read: Delhi High Court refuses urgent listing of Spicejet’s plea challenging order

There are also concerns over the airline failing to deposit its share of the provident fund with the Employee’s Provident Fund Organisation as well as tax deducted at source with the Income Tax department.

Over the past year, several engine and plane lessors have dragged SpiceJet to courts seeking its liquidation due to its failure to clear its dues.

A view of the Delhi High Court. File
| Photo Credit: The Hindu

The Delhi High Court on Friday (August 16, 2024) refused to grant an urgent listing of low-cost airline Spicejet’s plea challenging an order to ground three aircraft engines by today and hand over those to the lessors within 15 days.

The plea was mentioned for urgent hearing before a Bench of Acting Chief Justice Manmohan and Justice Manmeet P. S. Arora. The Bench said listing the plea during the day was not possible and it will be heard on August 20.

“It is very difficult to list it today. Several judges are on leave today. Let the learned judges read the papers (case documents). We will have it on Tuesday,” the Bench said.

Spicejet has challenged a single judge’s August 14 order directing it to ground three engines by Friday and hand them over to their lessors within 15 days.

The judge had directed the airline to offer prior inspection of the engines to the lessors — Team France 01 SAS and Sunbird France 02 SAS — through their authorised representative at the Delhi airport within seven days.

Senior advocate Amit Sibal, representing Spicejet, insisted that the plea be heard in the post-lunch session of the court as there is grave urgency and the grounding of three engines would lead to the grounding of two aircraft.

“This would cause grave inconvenience to passengers as flights would have to be cancelled and tickets are already booked,” the counsel submitted, adding there are 21 aircraft with the airline.

Delhi HC sets aside order upholding arbitral award in favour of Kalanithi Maran in dispute with SpiceJet

To this, the Bench said it is absolutely impossible to read the papers during the day and added, “Let the airline manage with 19 aircraft and we will have the matter on Tuesday”.

In its order, the single judge said, “This court has no option but to direct the defendant (Spicejet) to ground the three engines with effect from August 16, 2024. The defendant will take steps to ensure that the engines are redelivered to the plaintiff within 15 days from today (August 14)”.

The court had passed the order on pleas by the lessors seeking a direction to Spicejet to hand over the possession of three engines on termination of the lease agreements.

It was stated in the pleas that following the termination, the plaintiffs had directed the airline to ground and re-deliver the engines and pay all outstanding dues, but the carrier failed to do so.

“It is however clarified that the defendant will remain liable for making payments, which it undertook in an order dated May 29, 2024, towards the admitted outstanding of $4.8 million and towards the weekly payments arising on account of the use of the Engines under the aegis of this court.

“The return of the engines does not absolve the defendant from its liability for the payments which have admittedly fallen due and to that extent the plaintiff is entitled to recover the said amount from the defendant through execution of the order dated May 29, 2024,” the court said.

The single judge said that in view of the airline’s unequivocal admissions qua its liability towards the lessors, the plaintiffs have made out more than a prima facie case for grant of reliefs sought in the interim applications for restraining the defendant from operating the three engines and issuing direction to it to ground the same for it to be redelivered to the plaintiff.

“This court also finds favour in the submission of the plaintiff that it is suffering irreparable loss due to continuing use of engines by the defendant as engines are depreciating assets which suffer wear and tear,” the court had said.

It had added that Spicejet is a “defaulter and has no legal and contractual right to continue the use of the engines”.

“The inability of the defendant to pay the admitted outstanding dues is writ large on the face of the record and in fact permitting the defendant to continue the use of the engines without payment would only cause financial distress to the plaintiff and therefore, the balance of convenience is against the defendant and in favour of the plaintiff,” the court had said.

It had directed the airline to take all precautions and compliances to ensure that the engines are redelivered to the plaintiffs in accordance with terms of lease agreements executed between the parties.

In its response to the applications, the airline’s counsel had submitted that after filing the suit, the defendant made a payment of $7.18 million between December 14, 2023 and May 24, 2024.

The counsel had said that after the settlement terms were recorded before the court in May, the airline made a payment of $1.48 million and as of August 12, there is an admitted default to the extent of $2.67 million towards the outstanding amount.

He had said while the defendant admits that there has been a default, it was making its best endeavour to regularise these defaults and sought an extension of time until September 30 to clear the dues.

New Delhi:

Airports across India are still grappling with issues from yesterday’s massive Microsoft outage. Although the situation has improved significantly since Friday’s chaotic scenes, passengers continue to face challenges, particularly at Delhi’s Indira Gandhi International Airport (IGI).

At Delhi’s IGI Airport’s Terminal 3, passengers experienced some improvement today, but a few problems persist. Yesterday, the automatic self-drop baggage and check-in machines were non-functional, causing long queues outside Gate No. 5 in Terminal 3. While many passengers can print out their boarding passes today, international travellers still face issues with boarding pass generation, with some being issued manual passes inside the airport.

The Digi Yatra machines at Gates 1-3, which facilitate seamless entry, remain non-operational, necessitating manual entries. Display boards showing wait times, flight schedules, and other crucial information, which were down yesterday, are now functional. However, the overall system has not yet fully recovered, as confirmed by airport officials.

Mumbai’s Chhatrapati Shivaji Maharaj International Airport fared better than its counterparts in Delhi and Bengaluru. Although long queues were reported, operations are running more smoothly today. Nonetheless, two flights, one to Varanasi and one to Kochi, were cancelled this morning, and several international flights were rescheduled. This is an improvement from yesterday when nine domestic flights, all operated by IndiGo, were cancelled. IndiGo has warned of potential cancellations today but expressed optimism that yesterday’s disruption will not be repeated as the Microsoft outage was not reported today.

Global Outage

The outage, attributed to an update by global cybersecurity firm CrowdStrike, disrupted Microsoft’s Windows systems worldwide, affecting financial institutions, airlines, hospitals, and media channels. In India, this caused airline check-in systems to crash, leading to delays and the cancellation of dozens of flights. IndiGo alone cancelled around 200 flights, with hundreds more delayed as manual check-in procedures significantly slowed the process.

The Indian financial sector experienced minor disruptions at about ten banks and non-banking financial companies (NBFCs), which have largely been resolved, according to the Reserve Bank of India. However, the outage’s impact on airports from Chennai to Delhi was severe, with passengers facing long queues due to unavailable web check-in services and manual ticketing processes.

Airlines such as IndiGo, Akasa Air, Vistara, Air India, SpiceJet, and Air India Express acknowledged the issues via social media. Passengers received handwritten boarding passes, and the manual ticketing and luggage check-in process extended to 30-40 minutes per person, leading to frustration and overcrowded lounges.

Other Airports

Besides Delhi and Mumbai, high-density airports like Bengaluru and Chennai saw the most significant impacts. At Bengaluru’s Kempegowda International Airport, airlines such as IndiGo, Akasa, SpiceJet, and Air India Express initiated manual check-ins to ensure minimal disruption.  The technical glitch has been fully resolved at Bengaluru airport, and operations have returned to normal. However, there is slight congestion due to the residual impact of yesterday’s operational delays. Due to the backlog, it will take a few hours for the crowds to clear.

Hyderabad’s Rajiv Gandhi International Airport experienced cancellations of 23 flights, including IndiGo flights to Visakhapatnam, Tirupati, Ahmedabad, and Bengaluru.

Ministerial Assurances

Union Civil Aviation Minister Rammohan Naidu assured that the ministry and the Airports Authority of India (AAI) are managing the situation using manual methods to minimise disruption. Minister for Information Technology Ashwini Vaishnaw confirmed that the cause of the outage had been identified and that updates had been released to resolve the issue. According to the Aviation Ministry, systems at airports across the country started operating normally from 3 am this morning. 

“By noon today, we expect all issues to be resolved,” the ministry said in a statement. 

CrowdStrike confirmed the problem was due to a defect in a content update for Windows hosts and not a security incident or cyberattack.

Mumbai:

SpiceJet said late on Friday that all its systems at airports, ticket bookings and call centres are up and running smoothly after a “successful resolution” of a Microsoft outage that impacted the aviation industry all through the day.

“The technical outage has been fully resolved, and all our systems are back to normal operations,” SpiceJet Chairman and Managing Director Ajay Singh said in a statement.

The outage, which began Friday morning, affected airlines globally, causing temporary disruptions to online services and airport check-in processes.

The airline said that despite the challenges posed by the global technical outage, it is operating all scheduled flights as planned on Friday and claimed there was not even a single cancellation due to the technical outage.

“Our team worked to ensure minimal disruption to our passengers’ travel plans. We appreciate the understanding and cooperation of our passengers and stakeholders during this time,” the airline said

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

A SpiceJet employee was arrested after she slapped a male assistant sub inspector following an altercation over security screening at the Jaipur airport. The incident was caught on a CCTV camera at the airport.

According to CISF officials, Anuradha Rani was stopped by assistant sub inspector Giriraj Prasad over not having valid permission to enter through a gate while she was entering the airport with other staff members around 4 am. Ms Anuradha was then asked to undergo screening for airline crew at a nearby entrance but no female CISF personnel was present there at the time, they added.

The assistant sub inspector then called for a female colleague to complete the security check but an argument had already escalated by then which ended with the female employee slapping the assistant sub inspector, said Jaipur airport station house officer Ram Lal.

According to an official statement by a SpiceJet spokesperson, the employee had a “valid airport entry pass”. The company has also alleged that the female employee was “subjected to inappropriate and unacceptable language by the CISF personnel, including asking her to come and meet him after his duty hours at his home.”

“Today, an unfortunate incident occurred at Jaipur Airport involving a SpiceJet female security staff member and a male CISF personnel. While escorting a catering vehicle at the steel gate, our female security staff member, who had a valid airport entry pass issued by the Bureau of Civil Aviation Security (BCAS), India’s civil aviation security regulator, was subjected to inappropriate and unacceptable language by the CISF personnel, including asking her to come and meet him after his duty hours at his home,” said the SpiceJet spokesperson.

“SpiceJet is taking immediate legal action in this serious case of sexual harassment against its female employee and has approached the local police. We stand firmly by our employee and are committed to providing her with full support,” the spokesperson added.

Police have registered a case against the female employee under sections 121 (1) (voluntarily causing hurt to deter public servant from his duty) and 132 (assaulting public servant) of Bharat Nyaya Sanhita (BNS).

KAL Airways and Kalanithi Maran on Monday said they will seek more than ₹1,323 crore in damages from SpiceJet and its chief Ajay Singh as well as challenge the recent Delhi High Court order in the ongoing dispute between the two sides.
| Photo Credit: REUTERS

KAL Airways and Kalanithi Maran on Monday said they will seek more than ₹1,323 crore in damages from SpiceJet and its chief Ajay Singh as well as challenge the recent Delhi High Court order in the ongoing dispute between the two sides.

On May 17, a division Bench of the court set aside a single judge Bench order that had upheld an arbitral award asking SpiceJet and its promoter Ajay Singh to refund ₹579 crore plus interest to Mr. Maran.

The Bench allowed the appeals filed by Mr. Singh and SpiceJet challenging the single judge’s order, passed on July 31, 2023, and remanded the matter back to the court concerned to consider the petitions challenging the arbitral award afresh.

Against this backdrop, Mr. Maran and his firm KAL Airways have decided to challenge the ruling after consultation with their legal counsel.

The decree holders — KAL Airways and Mr. Maran — “believe that the aforesaid judgement is deeply flawed and warrants further scrutiny”.

“In parallel, they are also seeking damages in excess of ₹1,323 crore, as determined by FTI Consulting LLP, United Kingdom, a globally renowned firm that specialises in estimation of losses arising out of breach of contractual commitments,” KAL Airways said in a statement on Monday.

Further, it said the claim for damages had originally been presented by KAL Airways and Mr. Maran before the arbitral tribunal and “has always remained an integral part of their quest for justice”.

By pursuing both the challenge to the Delhi High Court judgement and the claim for damages, the decree holders hope to secure a just and equitable resolution to the contentious dispute, the statement said.

The dispute arose due to a breach of trust by SpiceJet and has caused “enormous hardship to both KAL Airways and Kalanithi Maran for more than a decade,” it added.

According to the statement, they will pursue the execution of the arbitral award, seeking a refund of the pending dues amounting to ₹353.50 crore.

“This action is also in full compliance with, and supported by, the orders dated February 13, 2023, and July 7, 2023, passed by the Hon’ble Supreme Court directing that the award in favour of the decree holders is executed in its entirety,” it said.

On May 22, SpiceJet said it will seek a refund of ₹450 crore out of the total ₹730 crore paid to the airline’s former promoter Mr. Maran and KAL Airways following the Delhi High Court ruling.

The case dates back to early 2015, when Mr. Singh, who owned the airline earlier, bought it back from Mr. Maran after it was grounded for months due to resource crunch.

As part of the agreement, Mr. Maran and KAL Airways had claimed to have paid SpiceJet ₹679 crore for issuing warrants and preference shares.

However, Mr. Maran approached the Delhi High Court in 2017, alleging SpiceJet had not issued convertible warrants and preference shares nor returned the money.