SpiceJet steals a march with Go First bankruptcy: 25 planes back in flight
With firm government backing, SpiceJet to revive 25 grounded aircraft while borrowing from the Emergency Credit Line Guarantee Scheme.
The airline said funds for the revival would be drawn from the government’s Emergency Credit Line Guarantee Scheme (ECLGS) and it also will also aim for better cash accruals.
SpiceJet operates roughly 80 flights and is attempting to resurrect 25 grounded Boeing 737 and Q400 aircraft. SpiceJet on Wednesday said that it has already mobilised around Rs 400 crore towards getting its grounded fleet back in the air, further enhancing its top line.
Ajay Singh, chairman and managing director of SpiceJet, said, "We are meticulously working towards returning to service our grounded fleet in the air soon. The majority of the ECLGS funding received by the airline would be utilised for the same, which will help us capitalise and make the most of the upcoming peak travel season."
The government established the ECLGS to assist businesses in dealing with the effects of the COVID-19 pandemic. It provides guaranteed coverage to banks and non-banking financial companies (NBFCs), allowing them to extend emergency loans to diverse industries to satisfy working capital requirements.
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SpiceJet too has experienced a series of challenges over the past few years, beginning with the grounding of their Boeing 737 MAX in March 2019 following two tragic crashes and the pandemic significantly impacting the struggling airline. Aside from financial difficulties, SpiceJet aircraft were also involved in incidents in 2022, prompting the Directorate General of Civil Aviation (DGCA) to issue a show-cause notice to the airline.
Meanwhile, on Tuesday, PTI quoted competitor Go First's CEO Kaushik Khona as saying that the airline had grounded 28 planes (up from the 25 reported earlier in the day), or more than half of its fleet, due to a lack of engines from Pratt & Whitney (P&W), resulting in a cash crunch and the temporary suspension of operations.
P&W said in a statement on Wednesday that it was committed to the success of its airline customers and that delivery schedules for all customers continue to be prioritised. "P&W is following the March 2023 arbitration judgement about Go First. We will not comment further because this is now a litigation issue," it said.