SpiceJet says 'no question of filing insolvency' amid Go First crisis

Budget carrier SpiceJet Ltd on Thursday said there's "no question of filing insolvency" and that it is in fact "geared up to boost fleet and expand network".

SpiceJet said it has initiated the process of reviving its grounded fleet with the $50 million funds received by the airline from the government’s Emergency Credit Line Guarantee Scheme (ECLGS) and internal cash accruals. 

"In view of the recent developments in the Indian aviation market, the airline has categorically stated that it has no plans whatsoever to file for insolvency. We want to scotch any speculation that may have arisen due to the filing by another airline. The airline is firmly focussed on its business and remains in active talks with investors to raise funds," said SpiceJet while referring to the Go First crisis.

“There is absolutely no question of filing for insolvency. Any rumour regarding the same is completely baseless. We are focussed firmly on reviving our grounded fleet and getting more and more planes back into the air. Work on this front has already begun and the company is using the $50 million ECLGS funds and our own cash,” said Ajay Singh, Chairman and Managing Director, SpiceJet.

“We have a great relationship with all our partners. Our lessors have supported us through the thick and thin and continue to do so and we are grateful for their support and confidence.”

On Thursday, SpiceJet's scrip on BSE closed trading 2.25% higher at Rs 31.8.

SpiceJet had last week announced plans to revive 25 grounded aircraft that will help it capitalise and make the most of the upcoming peak travel season.

Rumours started doing rounds that SpiceJet is headed the Go First way because earlier this week, SpiceJet's lessors have approached aviation regulator DGCA for deregistration of three planes of the airline.

Many aircraft of the budget carrier are grounded due to various reasons. The airline's three lessors -- Wilmington Trust SP Services, Sabarmati Aviation Leasing and Falgu Aviation Leasing -- have sought deregistration of one aircraft each, according to an update on the regulator's website.

The latest development comes a day after the National Company Law Tribunal (NCLT) issued a notice to the Ajay Singh-promoted private carrier on a petition filed by an aircraft lessor seeking initiation of insolvency resolution proceedings against it.

According to an aircraft tracking website, SpiceJet had 67 aircraft in its fleet comprising Boeing 737, B737 Max and regional jets Bombardier-Q400. Out of them, 37 were in operations and 30 were not in service as on May 3.