Cash-strapped low-cost carrier SpiceJet on Wednesday said that it would use the government's Emergency Credit Line Guarantee Scheme to bring 25 of its grounded aircraft back into service. The announcement came a day after Go First filed for insolvency, due to faulty engines which resulted in nearly half of its fleet being grounded.
SpiceJet said it would look to borrow ₹ 400 crore to get its 25 grounded fleet back in the air. The Emergency Credit Line Guarantee Scheme was set up by the government to help businesses cope with the impact of the coronavirus pandemic.
Ajay Singh, the chairman and managing director of SpiceJet, in a statement said, "We are meticulously working towards a return to service of our grounded fleet back in the air soon." He further added that the majority of the funding would be utilised for the same and this will help the airline make the most of the upcoming peak travel season.
Drop in net worth of SpiceJet
In February, the carrier after a string of quarterly losses and dwindling cash reserves had said it will be looking into options to raise fresh capital through issuance of securities to qualified institutional buyers. The carrier's net worth dropped to a negative ₹ 4,340 crore by end of March 2022. Additionally in the four years leading to March 2022 the company reported a loss of ₹ 3,870 before tax.
According to air traffic data from the aviation regulator for March, the company's market share fell down to a low of 6.4 per cent, lower from 12.7 per cent it reported in March 2018.
SpiceJet's current operations
Spice Jet had to ground some of its Boeing 737 Max aircraft and is still dealing with working capital issues. The carrier is currently operating with only 44 planes and around 25 of its aircrafts have been grounded.
SpiceJet shares rise after announcement
After the company made the announcement SpiceJet's shares went up by 4.8 per cent to ₹ 33.
