SpiceJet is facing significant challenges concerning its financial stability, regulatory compliance, and operational future. Over the past few years, the airline’s condition has worsened. Dozens of its aircraft are currently grounded for various reasons, and passenger trust is dwindling. The airline’s financial situation is precarious, with its market share plummeting to just 3.2%. SpiceJet is now plagued by bank defaults, legal battles, flight delays, financial instability, declining market share, delayed employee provident fund payments, numerous complaints, falling revenue, years of losses, and regulatory action from the DGCA.
SpiceJet is in prolonged severe financial distress, burdened with heavy debt. However, in February this year, the company’s fortune changed overnight. The company’s quarterly results were announced. SpiceJet, which had been suffering huge losses for many years, turned profitable. But the question is—after years, is this profit real, or is there another story behind it? Read ahead for ZEE’s investigation.
SpiceJet has always been trapped in financial crises. Ajay Singh, who launched the airline under the SpiceJet branding in 2004, saw his low-cost airline deteriorate within 10 years to the point that it was on the verge of shutting down in 2014. Flights began getting canceled. Passengers started getting stranded at airports. By the end of 2014, SpiceJet was about to go bankrupt.
But in January 2015, Ajay Singh bought the entire stake from the Sun Group, and it seemed like everything would be fine. But 10 years later, in 2024, the same pattern returned. Flights started getting canceled, and passengers began getting stranded at airports. The aviation market share shrank from 17.4% to 3.2%.
On September 4, 2024, an HSBC Global Research report stated that the company’s condition was extremely poor, it was facing a severe cash crunch, and growth prospects were minimal. Surviving in competition wouldn’t be easy, so HSBC Global Research cut SpiceJet’s share target by 58%.
In 2024, SEBI came forward to rescue SpiceJet. Repeated claims were made that foreign investors were not betting on SpiceJet alone but on India’s aviation sector. However, this was not true. In SpiceJet’s QIP (Qualified Institutional Placement), the biggest share of 9.3% went to Authum Investment & Infrastructure Ltd., a company linked to market operator Sanjay Dangi’s family. After raising Rs 3,000 crore through QIP, Ajay Singh seemed quite pleased.
While the QIP may have excited SpiceJet’s founder, experts advised caution before investing. Stock market expert Kshitij Mahajan told Zee News, “They haven’t even put a quarter of the QIP amount into their bank book. They may survive for some time, but let’s see how they handle it in the future. My advice to any shareholder is to think carefully before making a decision. Don’t go by what FIIs and DIIs are doing because they aren’t investing a large part of their hard-earned money.”
SpiceJet Group has another company, Spice Healthcare Pvt. Ltd. It is also a promoter of SpiceJet, and before September 2024, it held a 4.36% stake in SpiceJet. Spice Healthcare decided to increase its stake in SpiceJet but sought a regulatory exemption from SEBI to do so without an open market offer. To get this exemption, Spice Healthcare sent SEBI a total of 10 emails over nine months.
SEBI exercised its special powers and allowed Spice Healthcare to buy a 13.74% stake in SpiceJet. Additionally, it granted the exemption allowing the promoter to increase its stake without making an open offer, while the rule states that when a stake increase exceeds 5%, an open market offer is mandatory.
Interestingly, Ajay Singh is the promoter of both SpiceJet and Spice Healthcare. To secure this exemption, Spice Healthcare proposed certain self-imposed restrictions to SEBI, such as:
— Limiting its voting rights
— Extending the lock-in period for newly acquired shares to 24 months
SEBI granted the exemption based on these conditions.
SpiceJet has been given opportunities to survive multiple times over the past 20 years. Every time, the government and regulatory agencies have provided relief to the airline. Yet, instead of improving, the company’s condition has only worsened. In terms of service quality, its performance is extremely poor. Flights get delayed and canceled, and passengers suffer losses.
A company’s true health is reflected in its balance sheet. However, several questions have been raised regarding SpiceJet’s financial records. The company, which is drowning in losses, is steadily losing market trust. It is also burdened with heavy debt, which it struggles to repay. The company has been in losses for the past five years.
According to data, SpiceJet currently has liabilities exceeding Rs 9,000 crore. Clearly, instead of soaring, SpiceJet appears to be a sinking ship.
In 2014, SpiceJet had a 17.4% market share in India’s aviation sector. Today, it has shrunk to 3.2%. Interestingly, Akasa Air, which started in August 2022, now holds a 4.7% market share in the Indian aviation market, which is 47% (46.87%) higher than SpiceJet’s share. A two-and-a-half-year-old airline has surpassed the SpiceJet.
Zee News reached out to SpiceJet for a response. In an emailed statement, the airline denied any financial irregularities.
Below is SpiceJet’s email response to our journalist’s questions regarding these concerns, addressed to Ajay Singh, Chairman & Managing Director of SpiceJet.
Please find below our response to your queries. Our response can be attributed to SpiceJet Spokesperson.
Please carry our response in full.
“The overall tone of the questionnaire appears to be unduly negative and the questions partially inaccurate. It seems that someone is deliberately attempting to mislead and malign SpiceJet by planting misleading and baseless information. We hope that Zee Media will not fall for this misinformation and will exercise caution in reporting anything that is factually incorrect or defamatory.”
*1. On Financial Health & Profitability*
“Mr. Singh, SpiceJet recently posted a ₹26 crore profit for Q3, marking its first profit in a decade. However, financial disclosures indicate that this was largely due to debt restructuring rather than operational revenue growth. How do you plan to ensure that future profitability is driven by sustainable business operations rather than accounting maneuvers?”
Response: The tonality of this question is extremely negative and the journalist appears to be raising doubts where none exist.
SpiceJet is a listed company and our financial records are completely transparent and in public domain. There is no ‘accounting maneuver’ as alleged by the reporter. Our balance sheet is in the public domain, accessible to everyone.
SpiceJet’s Rs 26 crore net profit in Q3 FY25 and achieving a positive net worth after a decade marks a significant milestone in our turnaround journey. This performance reflects our resilience and unwavering commitment to financial and operational recovery. The success of our Rs 3,000 crore Qualified Institutional Placement (QIP), backed by global investors, has bolstered our balance sheet, enabling us to resolve legacy liabilities and clear Rs 601 crore in statutory dues, while fueling fleet expansion with 10 aircraft inducted in Q3 alone.
Our total revenue surged 53% in Q3 to Rs 1,651 crore as compared to the previous quarter, driven by strong passenger demand, improved yields, and operational efficiency.
Looking ahead, we expect double-digit RASK growth in Q4 FY25, which will further enhance cash flows. Ongoing talks with OEMs for advanced aircraft deliveries and exploration of organic and inorganic growth opportunities signal our focus on long-term resilience. While challenges remain, our disciplined strategy and proactive measures position SpiceJet for a stronger, more sustainable future.
*2. On SEBI Exemption & Shareholding Shift*
“SEBI’s recent exemption allowed SpiceJet’s promoters to acquire a 13.75% stake, bypassing the usual 5% cap—an unprecedented move in India’s financial history. Minority shareholders, who lost a portion of their stake, have expressed concerns. Can you clarify why this exemption was necessary and how you plan to rebuild investor confidence?”
Response: SpiceJet strongly refutes the premise of your question, as it is based on information that is absolutely incorrect, misleading, and factually inaccurate. The exemption granted to SpiceJet’s promoters is fully compliant with SEBI’s established rules and regulations. Such exemptions are neither unprecedented nor unusual – they are routinely granted by SEBI in similar cases where companies are undertaking strategic financial restructuring to strengthen their business and improve shareholder value. This is neither an anomaly nor a deviation from standard practice in India’s financial markets.
This exemption was publicly disclosed and announced by SpiceJet in a transparent manner, in full compliance with SEBI’s procedural requirements.
Any suggestion of impropriety or lack of clarity is baseless and appears to stem from either a misunderstanding of regulatory norms or a deliberate attempt to misrepresent facts.
The claim that minority shareholders “lost a portion of their stake” is also misleading. The increase in the Promoter Group’s stake from 29.11% to 33.47%, as part of the warrant conversion exercise, does not dilute the ownership of minority shareholders in any manner.
To say that minority shareholders have “lost” a portion of their stake is a deliberate misinterpretation by the reporter and an attempt to twist facts. We take this very seriously and reserve the right to take appropriate legal action in case of any misreporting. The exemption and subsequent shareholding shift are in fact a part of a broader effort to enhance the company’s financial stability and operational strength, which ultimately benefits all shareholders.
We have consistently acted in line with regulatory guidelines and will continue to engage with all stakeholders to address any concerns transparently and responsibly.
*3. On Stock Market Volatility & Retail Investors*
“SpiceJet’s stock saw a sharp surge before the QIP, attracting retail investors who later faced losses when institutional investors exited. Given the concerns around stock price manipulation, how does the company plan to ensure transparency and fair play for all investors moving forward?”
Response: We categorically deny the baseless and misleading assertions embedded in your question. The suggestion that the company’s stock surge before the Qualified Institutional Placement (QIP) was linked to any form of manipulation is absolutely false and unsupported by facts. Stock price movements are driven by market dynamics, investor sentiment, and publicly available information – none of which indicate any irregularity or misconduct on SpiceJet’s part.
The claim that retail investors “faced losses when institutional investors exited” is a speculative and incorrect narrative. It falsely implies an orchestrated sequence of events that simply did not occur. SpiceJet has adhered strictly to all regulatory requirements under SEBI and stock exchange guidelines during the QIP process, ensuring full transparency and compliance. Any insinuation of unfair play or manipulation is not only defamatory but also demonstrates a clear lack of understanding of standard market practices and the company’s actions.
Allegations of this nature appear to be a deliberate attempt to mislead and malign the company, and we strongly urge Zee Media to refrain from propagating such unfounded claims without evidence.
The company will take strong legal action against any misleading or baseless reports that seek to damage our reputation or mislead the public.
*4. On Fleet Expansion & Operational Stability*
“SpiceJet currently operates with just 27 aircraft, and reports indicate no new deliveries before 2029. With competitors expanding aggressively, how does the airline plan to address its fleet shortage and maintain operational efficiency in an increasingly competitive market?”
Response: This is completely incorrect and misleading information, demonstrating a clear lack of understanding of the facts. SpiceJet has consistently provided accurate and transparent updates on its fleet expansion and operational plans through regular media statements since the QIP.
SpiceJet is uniquely positioned having a substantial number of grounded aircraft that can be swiftly reactivated. Following the successful Rs 3,000 crore QIP, SpiceJet’s immediate focus has been the Return to Service (RTS) of its 28 grounded aircraft – a fact widely reported in the media. We have already successfully ungrounded four aircraft, including a 737 Max, with several more expected to return to service shortly. Rs 800 crore from the QIP has been specifically allocated for the RTS of these grounded planes, reinforcing our commitment to strengthening operational capacity. In Q3 FY25 alone, we invested Rs 170 crore toward this effort.
To accelerate this process, we have signed a comprehensive services agreement with StandardAero Inc., a leading U.S.-based engine MRO provider, to restore our grounded MAX fleet. Additionally, we are working with other OEMs and MRO partners to expedite the restoration of more aircraft, further enhancing our fleet strength and operational capabilities.
To address any immediate fleet shortfall, SpiceJet has also been strategically adding aircraft through wet lease agreements, ensuring uninterrupted service and seamless network expansion. This strategy has already borne results – SpiceJet has added over 60 new flights, expanded its network by introducing new stations like Shivamogga and Prayagraj, and revived previously served destinations such as Gorakhpur. This rapid expansion reflects SpiceJet’s operational agility and its ability to compete aggressively in the market while providing enhanced connectivity and convenience to passengers.
Furthermore, as stated in our Q3 release, we are in advanced discussions with OEMs for early aircraft deliveries and are actively pursuing both organic and inorganic growth opportunities. SpiceJet’s long-term growth strategy is firmly on track, supported by strong financial backing, a clear operational roadmap, and a demonstrated ability to adapt and thrive in a highly competitive market.
*5. On Employee Welfare & Salary Payments*
“Reports suggest that SpiceJet employees have faced delayed salary payments for nearly 30 months. Employees are the backbone of any airline. What concrete steps are being taken to ensure their financial security and morale, especially as the company raises fresh capital?”
Response: We are astonished and dismayed that this question relies on outdated, irrelevant, and flatly inaccurate information, suggesting either a deliberate attempt to mislead or a shocking lapse in journalistic diligence.
Any misleading or baseless report will be met with appropriate legal action.
As widely reported by leading media, including Zee Business, SpiceJet cleared all outstanding employee salary dues immediately after the successful completion of its QIP. In fact, the pending salaries were credited the very same day the QIP funds were received. Furthermore, SpiceJet has settled all Provident Fund (PF) and Tax Deducted at Source (TDS) dues for its employees. The company has spent a total of Rs 601 crore to clear all outstanding liabilities, including GST, EPF, TDS, and other statutory dues.
Post-QIP, the company swiftly completed the appraisal process for all employees, and the revised salary scales have already been implemented. This demonstrates our firm commitment to employee welfare and financial security.
For the first time in over a decade, SpiceJet has turned net worth positive – an important milestone that reflects the success of our turnaround strategy and strengthens the foundation for future growth. Our financial and operational stability has also been validated by multiple credit rating upgrades from Acuité Ratings & Research Limited and CareEdge Ratings.
The positive impact of our strategic efforts is already visible. The ungrounding of aircraft and operational improvements have led to a 53% surge in total revenue to Rs 1,651 crore in Q3 FY25 compared to the previous quarter, with the company reporting a profit of Rs 26 crore.
SpiceJet values its employees as the backbone of the organization. The steps we have taken not only secure their financial well-being but also reinforce our long-term vision of building a stronger, more resilient airline.
*6. On Long-Term Survival Strategy*
“SpiceJet’s debt burden remains a major challenge, and analysts have questioned its long-term sustainability. What is your strategic vision for SpiceJet over the next five years? How do you plan to balance financial restructuring, fleet expansion, and market share growth to secure the airline’s future?”
Response: SpiceJet categorically dismisses the tired, recycled narrative of an insurmountable “debt burden” and “so-called” analyst doubts about our sustainability as lazy speculation that ignores our proven resilience and strategic clarity.
SpiceJet has successfully navigated the complexities of the Indian aviation market for nearly two decades with remarkable resilience and strategic foresight. In 2015, we achieved a historic turnaround that defied expectations, and today, with our established experience and infrastructure, we are well-positioned not only to repeat but to exceed that success. SpiceJet has the expertise, operational strength, and a clear strategic roadmap to grow into a 100-aircraft airline once again.
The recent capital infusion through the Rs 3,000 crore QIP has already enabled us to resolve approximately 70% of claims with lessors and vendors. For the remaining disputes, we are actively engaged with stakeholders, some of whom require internal board or committee approvals to finalize agreements. We are confident that these resolutions will further strengthen our financial position and operational efficiency.
Additionally, an extra Rs 676 crore from a previous funding round will further bolster our financial strength. On March 17, SpiceJet announced that its Founder and Promoter, Ajay Singh, will infuse Rs 294.09 crore into the company, increasing the consolidated shareholding of the Promoter Group from the current 29.11% to 33.47%. This significant investment underscores the promoter’s unwavering commitment to the airline’s future and strategic growth.
SpiceJet’s resilience is a proven fact. The fresh capital will drive fleet expansion, enhance operational efficiency, and unlock new growth opportunities. We are actively pursuing early deliveries of aircraft from OEMs and are focused on both organic and inorganic growth avenues. Our immediate goal is to restore our grounded planes to service, expand our network, and deliver greater value to our customers and stakeholders.
With a strengthened financial foundation and a clear strategic vision, SpiceJet is well on course to consolidate its market position, capture new opportunities, and secure long-term, sustainable growth.