SpiceJet fleet thinning down

NEW DELHI: Low cost carrier SpiceJet claimed to have 26 Boeing 737s operational in its fleet on Tuesday — down from a summer high of 35. But in just five days, or by Sunday, the airline admits that its Boeing fleet has depleted by two more and is down to 24.
On Tuesday, COO Sanjiv Kapoor had said that the airline's daily flights were down from 345 in the summer to 300. But with two more planes not flying now, the cancellations have grown. While the LCC claims 50-odd flight reductions, industry sources say its actual fleet flying and number of daily flights being operated on them may be much lower—causing hardship to flyers who booked in advance.

"We are revamping the fleet to come out stronger and shed unfavourable contracts and unwanted aircraft. We are doing this as part of turnaround process ... (Our) schedule reduction is about 50," Kapoor told TOI on Sunday, while claiming that the airline's Boeing 737s fleet will grow to about 30 by year-end.

Aviation authorities are closely watching the crisis deepen at SpiceJet which needs immediate infusion of funds to survive. "We have summoned both the airline management and promoter group. They keep telling us that SpiceJet will soon be recapitalized. But nothing seems to be happening in reality on that front. We do not want to have another Kingfisher as we have seen what pain it entails for the stakeholders," said a senior official.

So will the aviation ministry and Directorate General of Civil Aviation (DGCA) just keep watching as SpiceJet reduces its fleet and flights? "We monitor the aircraft of financially weak airlines more stringently to ensure that safety is not compromised by lack of funds. We will take the next step if there is any chance of a cash crunch affecting maintenance or safety," said a senior DGCA official.

In its last months, Kingfisher (which closed in October 2012) had also drastically reduced its fleet and flights. SpiceJet's Kapoor, however, says that his airline is very different from Kingfisher and will not meet the same fate.

But to survive, SpiceJet promoters need to find an investor and fast. According to Centre for Asia Pacific Aviation, SpiceJet LCC needs $250 million, about Rs 1,500 crore, funding to stabilize operations with about Rs 1,000 crores immediately required. "SpiceJet's turnaround is dependent on solid recapitalization.

Their Q2 FY 15 performance is positive compared to Q2 FY 14 but not significant enough to draw investor or market attention. However, positive changes in the front end are visible and encouraging," CAPA says.