Fasten your seatbelts, SpiceJet is facing turbulence

Reason behind turbulence in Spice Jet's business
Reason behind turbulence in Spice Jet's business

by 5paisa Research Team Last Updated: 2022-07-08T15:47:48+05:30 IST

There have been unsavoury news flows about SpiceJet in the last few weeks. To be fair, the airline has had a chequered history. When the airline got into its first crisis, it had to be bailed out by the Maran group of Tamil Nadu. Later, when the Maran family had enough of this airline venture, it was once again the original promoter who had bailed out the company. SpiceJet had been lucky in the past to get a much longer handle, something that perhaps Jet Airways and Kingfisher never managed to get. So, now what has gone wrong?


Recently, the Directorate General of Civil Aviation (DGCA) issued a show cause notice to SpiceJet after a series of 8 malfunction incidents were reported in a span of just 18 days. Ina rather scathing note, the DGCA observed that "SpiceJet had failed to establish safe, efficient and reliable air services under Aircraft Rules, 1937". Even the rather suave and reticent Jyotiraditya Scindia agreed that such incidents reflected on poor internal safety oversight and inadequate maintenance actions. He underlined that safety was non-negotiable. 


The problems are not of recent origin. Way back in September 2021, when the DGCA had carried out a financial assessment, it emerged that SpiceJet was operating on a “cash-and-carry”, i.e. the absence of long term vendor relationships. It also emerged that most of the suppliers and approved vendors of SpiceJet were not getting their payments on a regular basis. This had created a shortage of spares and frequent invoking of MELs (minimum equipment lists). This were against the basic tenets of passenger safety in aviation.


If passenger safety is a non-negotiable issue for the DGCA and the Ministry of Civil Aviation, there are other more pressing irritants in the smooth functioning of SpiceJet. For instance, the number of close brushes with danger were getting too many for comfort. Secondly, SpiceJet came in second in terms of flight cancellations as per the DGCA. To top it, SpiceJet also featured among the list of airlines whose services were found most unsatisfactory. Ironically, close behind SpiceJet on this parameter was industry leader, Indigo Airlines.


The brushes with danger are rising by the day. On 02nd July, a SpiceJet flight made an emergency landing in Delhi airport after smoke billowed in the cabin. There have been not less than 5 such incidents in the last quarter and that is not making the DGCA or the Ministry of Aviation feel comfortable. SpiceJet also ranked second in terms of the number of flight cancellations with no reasons assigned. In a survey of passengers, it emerged the passenger dissatisfaction with SpiceJet for cutting too many corners, was highest with SpiceJet. 


Too much turbulence to handle


The number of such close encounters are becoming just too many in the case of SpiceJet. Here are some recent instances.


    • On 19th June, a Delhi-bound flight carrying more than 185 passengers caught fire soon after take-off from Patna airport literally forcing an emergency landing. Apparently, the fan of the plane had been damaged by a bird hit.

    • Ironically, on the very same day, the SpiceJet flight from Delhi to Jabalpur had to make an emergency landing in Delhi after it was found that the cabin pressure couldn’t be built up adequately as the plane gained altitude. Again a case of poor maintenance.

    • Prior to that on 04th May, a SpiceJet Boeing 737 MAX from Chennai to Durgapur was forced to turn back after the engine shut down in mid-air. This had happened just after an oil-filter warning had popped up on the cockpit.


The redeeming feature has been that there have been no casualties. However, that is not a very inspiring story. SpiceJet is already under a lot of financial strain after 2 years of COVID related restrictions took a huge toll on the profitability of the aviation business amidst idle assets. As the aviation industry prepares for a recovery, the big question is whether SpiceJet can really maintain passenger safety to inspire confidence. DGCA has been scathing and it remains to be seen what happens to SpiceJet, should the DGCA actually walk the talk.


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