Cash-strapped SpiceJet’s domestic market share nosedives to just 2.3% in August | Business News
Embattled airline 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.
The financial crisis-ridden airline’s domestic market share for August was the lowest that SpiceJet has seen over the past decade at least, and possibly in most of its nearly two decades of existence, per data available with the Directorate General of Civil Aviation (DGCA). The only exception was April 2020, when all domestic flights of all Indian carriers were grounded due to the nationwide lockdown following the outbreak of the COVID-19 pandemic. Monthly domestic air passenger and market share data starting 2014 is publicly available.
SpiceJet ferried just over 3 lakh domestic passengers in August, while the overall number of passengers on domestic flights across all airlines was 1.31 crore. IndiGo continued to dominate the Indian skies with a market share of 62.4 per cent in August, while the Tata group airlines—Air India, Vistara, and AIX Connect—had a cumulative market share of close to 30 per cent. Fledgling carrier Akasa Air’s domestic market share in August was 4.5 per cent.
In July, June, May, and April, SpiceJet’s domestic market share was 3.1 per cent, 3.8 per cent, 4 per cent, and 4.7 per cent, respectively, showing a clear and steady decline on a sequential basis. In the first eight months of 2024, the airline’s market share averaged at 4.2, down from 5.5 per cent for the entire 2023 and 8.7 per cent for 2022.
SpiceJet currently has an operational fleet of just around 20 aircraft, with almost double that number grounded. The cash-strapped airline has been struggling financially, running into rough weather with aircraft lessors and some airports. The carrier, which is in the process of raising funds via qualified institutional placement, has been irregular in salary payments as well, it is learnt.
The airline also recently announced a debt restructuring arrangement with lessor Carlyle Aviation, under which the latter will write off over $40 million in lease arrears, and convert another $30 million of debt into equity. The ongoing fund raise and this debt restructuring pact have ignited some hope that the airline could get on a path to recovery in the coming months.
While much of the Indian aviation industry charted a strong recovery from the massive hit of the COVID-19 pandemic, SpiceJet stands out as an exception. Over the past couple of years, the financial stress at the airline forced the regulator to take action to ensure safe flight operations.
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Late August, the DGCA placed the airline under “enhanced surveillance” in a bid to ensure safety of the low-cost carrier’s flight operations. The enhanced surveillance entails an increase in the spot checks and night surveillance of the airline’s operations to ensure operational safety. The impact of this move by the regulator, however, is unlikely to have played a role in the contraction in the airline’s August market share as the decision was announced on August 29. Any notable impact of the enhanced surveillance on SpiceJet’s operations is likely to be visible September onwards.
© The Indian Express Pvt Ltd
