SpiceJet to revive 25 grounded aircraft, secures Rs 400 crore in debt

On Wednesday, Budget airline SpiceJet borrowed Rs 400 crore in debt from the government’s Emergency Credit Line Guarantee Scheme (ECLGS) and is aiming to restart 25 grounded aeroplanes amid turmoil in the Indian aviation industry following Go First’s bankruptcy filing on Tuesday.

According to the information, the Delhi-based airline has secured around Rs 400 crore to clear the way for the return of its idle fleet which is likely to boost the revenue of the carrier.

The development comes at a time when the aviation industry is facing turbulence after Go First Airlines filed for bankruptcy on Tuesday.

Ajay Singh, Chairman and Managing Director of SpiceJet, stated that the airline is diligently working towards the fleet’s swift return to operation. Additionally, he said that the airline would use the majority of the ECLGS funding it had received for the same purpose, enabling it to take full advantage of the impending peak travel period.

The airline is also expecting a stronger balance sheet and post-hive-off of SpiceXpress. Notably, SpiceJet is one of India’s airlines that has made flying affordable for citizens.

Earlier in January, the Civil Aviation Ministry approved Spicejet’s reconstruction and revival plan. After the decision, the share of SpiceJet was trading at 4.2 percent, which was the day’s high hit 33.25.

SpiceJet said in a filing to the BSE today that it had received approval from the appropriate authority, the Ministry of Civil Aviation, Government of India, on January 22, 2015, for the “scheme of reconstruction and revival for the takeover of ownership, management, and control of SpiceJet Ltd.,” following the application made by the company.

According to sources, the proposal has received initial approval from the government. It has now been forwarded to the Security and Exchange Board of India (SEBI) for review to see if the new promoters’ planned investment of Rs 1,500 crore in the airline will trigger an open offer.

Airfares likely to rise: TAAI

According to the Travel Agents Association of India (TAAI), Go First’s decision to file for bankruptcy and cancelling flights is detrimental to the airline sector since it would restrict capacity and potentially raise prices on some routes.

Go First has halted flights for three days starting on May 3 owing to a severe financial crisis brought on by the forced grounding of more than half of its fleet due to P&W engine supply issues. Additionally, the airline owned by the Wadia group has requested voluntary insolvency resolution actions under the Insolvency and Bankruptcy Code (IBC).

Notably, the Wadia group Go First said on Tuesday that it has filed for insolvency resolution because it is unable to pay its debts and that 50 percent of its fleet has been grounded due to faulty engines manufactured by US firm Pratt & Whitney. According to CEO Kaushik Khona, the airline has requested voluntary insolvency resolution procedures before the National Company Law Tribunal (NCLT).

SpiceJet to introduce first international flight

According to the latest update, the budget carrier SpiceJet will introduce its first-ever international service from Maharaja Bir Bikram Airport, Tripura to Chittagong in Bangladesh by the first week of June as necessary clearances for immigration and customs are expected to be approved soon.

The development came just after a few days the Tripura chief minister Manik Saha met Civil Aviation Minister Jyotiraditya Scindia in the national capital and asked him to boost the connectivity in the northern-east state. CM also informed that the state has decided to install a bronze statue of Maharaja Bir Bikram at the new terminal building which was built at Rs 520 crore.