SpiceJet trims operations despite thriving aviation sector: Here's why
SpiceJet, a longstanding player in India's aviation sector, is poised to scale back its operations even as the industry anticipates record-breaking passenger traffic. The airline has sanctioned 1,657 weekly flights for the summer schedule of 2024, a 26% drop from the 2,240 flights slated for the current winter schedule. This mirrors last year's pattern when SpiceJet requested 30% fewer flights than the summer schedule of 2022.
DGCA's mandate and SpiceJet's counteraction
The Director General of Civil Aviation (DGCA) mandated SpiceJet to operate only half of its proposed flights by July 2023, in response to eight reported incidents of technical glitches between June 19 and July 5, 2023. A high-ranking company official revealed that despite requesting more flights in the winter schedule, SpiceJet was unable to operate all flights. As a result, they curtailed planned flights for the forthcoming summer schedule to avoid underutilization of airport slots.
Obstacles encountered by SpiceJet: Pilot deficit and soaring costs
SpiceJet's ambitions to expand capacity are stymied by intensifying competition for pilots and surging aircraft lease rates in India. The airline, currently operating a fleet of 33 aircraft with approximately 400 pilots, will require an extra 60 to 90 pilots due to new Flight Duty Time Limitations (FDTL) norms starting in June. A dearth of Boeing-737 certified pilots in the domestic market exacerbates these challenges.
Competitive pressure and workforce downsizing impacting SpiceJet
Rivalry from airlines such as Akasa Air and Air India's LCC (Air India Express also known as AIX Connect), who are aggressively recruiting Boeing pilots, have compelled SpiceJet to curtail its planned flying capacity. Last month, the airline unveiled plans to terminate 1,400 employees, nearly 15% of its workforce, in a bid to reduce expenses and sustain investor interest. This decision emerges amid a demanding environment characterized by heightened scrutiny from the DGCA.
SpiceJet's struggles with aircraft acquisition and leasing
SpiceJet is grappling with challenges in augmenting its fleet following the downfall of Go First Airlines and the Aviation Working Group's (AWG) demotion of India's lessor rating from "positive" to "negative" in December 2023. The downgrade transpired after lessors were unable to reclaim their aircraft from the insolvent Wadia Group's grounded airline, Go First. A company executive disclosed that the secondary leasing market has become prohibitively costly for Indian airlines, making it difficult to secure favorable deals.
