DGCA extends flight caps on SpiceJet till October 29; enhanced checks to continue

NEW DELHI: India’s aviation regulator on Wednesday extended an eight-week period it was struggling to survive SpiceJetIts activities have been cut in half from the originally approved summer schedule. This restriction will now continue until October 29, 2022, when the summer schedule ends.
After a series of incidents about low-budget airlines, the General Department of Civil Aviation (DGCA) on July 27, 2022, imposed the restriction for eight weeks and said any improvements in flights would only be allowed when SpiceJet could demonstrate it had the financial resources to do so. that safely.
Now that an eight-week period is coming to an end without SpiceJet being refinanced, the regulator has readjusted the situation and on Wednesday said the airline had seen a “significant reduction in the number of number of safety incidents”.
But as a matter of extreme caution, (it) has decided that the restriction imposed on the July 27 order will continue to be in effect until the end of the summer schedule – October 29, 2020. 2022,” order issued by Maneesh Kumar, General DGCA DG on Wednesday.
Kumar’s order says “any increase in the number of departures beyond the 50% approved under the summer 2022 schedule, during this time, will be subject to the airline having to demonstrate to the DGCA’s satisfaction that it has sufficient technical support and financial resources to safely and effectively carry out such capacity enhancement. During this time, the airline will be subject to increased scrutiny. ”
The SpiceJet promoter has been trying to raise funds and is in talks with various players to sell shares. However, so far there has been no refinancing.
As a result, SpiceJet delayed paying any percentage of the wages it paid to employees; does not pay PF for many employees and has yet to issue Form 16 of the final fiscal year. It put 80 pilots on unpaid leave for three months.
The only lifeline is a credit of around Rs 200 crore under the emergency line of credit guarantee (ECLGS).
The airline’s troubles have increased over the past few months due to the airline’s inability to refinance so far despite a reported attempt to sell shares to raise around Rs 2,000 crore.
Over the past few months, six leased Boeing 737s have been acquired by the lessor. SpiceJet’s Chief Financial Officer (CFO), Sanjeev Taneja, resigned effective August 31, 2022. The airline posted a loss of Rs 1,725 ​​crore in the fiscal year 2022. The company’s accumulated losses as of the year ended. March 31, 2022 is Rs 5,912.6. I
Its net worth has been completely eroded, with short-term debt exceeding current assets by Rs 6,408.7 crore as of March 31, 2022.
SpiceJet for almost a year has said it will have more Boeing 737MAX. Industry sources say the question is whether they can manage to finance those planes.
“Those who have little understanding of the situation of airlines and are especially wary when it appears that an airline is selling and subleasing planes is just to raise funds through those methods,” said one insider. industry said.

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