SpiceJet has suspended its flight operations from Chennai from the beginning of July due to a shortage of aircraft, with services expected to resume in October as the airline gradually rebuilds its fleet.
Until April, the airline operated 12 daily flights from Chennai, connecting the city with Ahmedabad, Mumbai, Kolkata, Kochi, Hyderabad, Shivamogga, Pune and Bengaluru.
Chennai is not the only city affected. SpiceJet has scheduled 44% fewer flights in July compared with April as it grapples with operational and financial challenges.
Why has SpiceJet suspended flights?
The airline’s available fleet has shrunk to around 12-13 aircraft from more than 30 a few months ago, forcing the temporary suspension of services to several destinations, including Chennai, Guwahati and Varanasi.
Data from the Directorate General of Civil Aviation (DGCA) shows that SpiceJet’s actual operations have declined sharply, with scheduled departures falling to 2,956 in May from 4,812 in January.
The reduction coincided with the return of leased aircraft to lessors, while higher aviation turbine fuel prices and a depreciating rupee exacerbated the airline’s financial strain. However, SpiceJet’s liquidity challenges long predate the recent West Asia crisis.
Why are passengers complaining?
Industry observers have also raised concerns that the airline continues to sell more seats than its available fleet can reliably operate, resulting in flight cancellations and prolonged delays for passengers. They have questioned the lack of regulatory intervention by the DGCA and the Ministry of Civil Aviation.
Responding to the concerns, a SpiceJet spokesperson said: “Some of our aircraft are currently undergoing scheduled maintenance, including routine checks and C-Checks, in line with the seasonal reduction in demand. We expect three aircraft to join in July, followed by two in August upon completion of their maintenance checks, and a further two aircraft each in September and October.
“In addition, we plan to induct 10 aircraft each in October and November under lease arrangements. The lease agreements for these aircraft are currently being finalised and executed, supporting our planned capacity expansion ahead of the peak travel season.”
How severe are SpiceJet’s financial problems?
The airline’s liquidity crunch is known to routinely affect employee payments for past many years. Salary disbursements have frequently been delayed, with internal communications to staff citing payments to lessors as a priority and urging employees to cooperate. There have also been complaints over delays in the deposit of provident fund (PF) contributions and tax deducted at source (TDS), affecting employees’ statutory dues.
The financial stress has also attracted regulatory scrutiny. On September 16, the Economic Offences Wing (EOW) of the Delhi Police registered a case against SpiceJet Managing Director Ajay Singh and other senior officials over allegations of cheating and criminal conspiracy in connection with provident fund dues. The case stems from a complaint by the Employees’ Provident Fund Organisation (EPFO), which alleged that the airline failed to remit more than ₹65.7 crore in employees’ PF contributions.
Primarily intended to support financially stressed airlines such as SpiceJet, the Union Cabinet in May approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, earmarking ₹5,000 crore to help carriers cope with liquidity pressures arising from elevated aviation turbine fuel (ATF) prices and disruptions caused by the West Asia conflict.
Under the scheme, eligible airlines, including SpiceJet, IndiGo and Air India, can access government-backed loans of up to ₹1,500 crore.
Didn’t SpiceJet raise fresh funds recently?
In September 2024, SpiceJet raised ₹3,000 crore through an oversubscribed Qualified Institutional Placement (QIP), followed by another ₹736 crore from an earlier funding round. The airline had said the capital would be used to revive grounded aircraft, settle liabilities, strengthen working capital and fund fleet expansion. While the fundraise helped improve its balance sheet and restart aircraft induction, the carrier continues to face liquidity pressures amid legacy debt, lease obligations and rising operating costs.
Before this, multiple aircraft and engine lessors, including Engine Lease Finance BV, Willis Lease Finance, Aircastle Ireland, Wilmington Trust SP Services and Celestial Aviation, initiated insolvency proceedings against SpiceJet over unpaid dues. While some petitions were settled or dismissed, the litigation underscores the carrier’s prolonged financial distress.
Published – July 03, 2026 11:10 am IST
