DGCA takes SpiceJet off ‘enhanced surveillance’ after recent fund infusion | Business News
Aviation safety regulator Directorate General of Civil Aviation (DGCA) has taken SpiceJet off the “enhanced surveillance” regime following rectification of deficiencies by the airline and the recent fund infusion into the carrier, which had been financially distressed for some time.
Enhanced surveillance entails an increase in the spot checks and night surveillance of the airline’s operations to ensure operational safety. On August 29, the DGCA had announced that it was placing SpiceJet under enhanced surveillance after the regulator found certain deficiencies during a special audit of the no-frills carrier’s engineering facilities in August.
The audit was conducted amid a growing number of flight cancellations by the airline and reports of the airline going through a period of significant financial distress, as the latter could “potentially affect discharge of mandatory obligations of aircraft maintenance”, per the DGCA.
In September, however, the airline had a successful Rs 3,000-crore fund raise through the qualified institutional placement (QIP) route. Apart from this, the airline said that it will receive another Rs 736 crore from its earlier funding round. With the cash in hand, SpiceJet has been quick to clear pending salaries, provident fund deposits, and tax dues. The budget airline has also been settling disputes with some of its lessors, and has even announced a near-term fleet augmentation plan to add more aircraft to its operational fleet.
“A total of 266 spot checks have been carried out by DGCA across various locations as part of the enhanced surveillance mechanism. It has been ensured that deficiencies and findings found during the spot checks have been subject to suitable rectification action by the operator. In light of the same and the financial infusion of additional funds into the company, SpiceJet has been taken off the enhanced surveillance regime,” the DGCA said Monday.
The regulator, however, added that random spot checks shall continue to be carried out across the airline’s operational fleet to “ensure continuing safety of operations”.
While much of the Indian aviation industry charted a strong recovery from the massive hit of the Covid-19 pandemic, SpiceJet stood out as an exception. The airline had been grappling with severe financial distress, hitting its fleet, network, and consequently market share.
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SpiceJet’s domestic market share crashed to a fresh low of 2.3 per cent in August as the low-cost carrier continued to reel under financial stress with a majority of aircraft in its fleet grounded due to various reasons including disputes with lessors and technical issues. SpiceJet had started the year with a domestic market share of 5.6 per cent in January. SpiceJet currently has an operational fleet of just 20-odd aircraft, with almost double that number grounded.
On October 8, the airline announced that it was in the process of expanding its operational fleet by 10 aircraft by November-end. Seven of these aircraft will be acquired on lease, while three previously grounded SpiceJet planes are being reintroduced into service. The airline plans to operationalize more of its grounded planes going forward in phases.
