SpiceJet's Overflowing Cup Of Woes, Is It Bad Luck Or Bad Management?

Recurring instances of flight mishaps, DGCA show cause notice and now an FIR against its CMD, SpiceJet seems to be constantly flying into the eye of the storm
Source: Shutterstock
Source: Shutterstock

A fall from grace is never a pretty sight, but few can stop watching, nonetheless. It is no wonder seeing SpiceJet continuously navigate turbulent weather over the past few weeks has grabbed several eyeballs, as it makes for gripping viewing. 

The latest salvo to hit the low-cost airlines comes in the form of an FIR against its Chairman and MD, Ajay Singh, based on a complaint by a Gurgaon resident, Amit Arora. As per an Indian Express report, Amit claimed that around 2016, "… the company required an overhaul and financial restructuring… the accused (SpiceJet) approached the complainant (Amit Arora) to salvage the situation. In lieu of the same, he promised to transfer… 10,00,000 shares to the complainant… who provided his services such as presenting the case of revival and restructuring in front of all authorities/government…."

Amit reportedly claimed that he requested Singh to transfer the promised shares, but Ajay instead provided a depository instruction slip (DIS) with his depository participant, Global Capital Markets Limited. When Amit's representative deposited the said slip, he found it invalid and outdated. Despite approaching Ajay several times for a new DIS, Amit claimed that none was forthcoming, prompting him to file an FIR on July 7 2022, with the Gurgaon Police.  

Quick to do some damage control, a SpiceJet spokesperson claims that "a frivolous, mischievous, and completely bogus complaint has been filed by liquor dealer Amit Arora with the Gurgaon police with an intention to hurt SpiceJet and Mr Ajay Singh's image. At no point has the company sought any service from him, nor did he ever provide any service to SpiceJet. Neither Mr Singh nor any concerned person from SpiceJet has ever met the complainant for any work, nor is there any written agreement between them. We are confident that the police investigation will prove the same and the FIR will be quashed. A defamation suit will be filed against the complainant by SpiceJet and Mr Singh."

Flying Into Rough Weather

The FIR against Ajay could not have come at a worse time for the Gurugram-based low-cost carrier, which has been battling several airline-related challenges for the past few weeks. 

On July 5, its SG-11 Dubai-bound flight made an emergency landing at Karachi's Jinnah International Airport due to a malfunctioning fuel indicator light. On the same day, a Kandla-Mumbai flight made another emergency landing after the airline's outer windowpane of the windshield cracked. Yet another Boeing 737 freighter, headed to Chongqing in China, returned to Kolkata after pilots realised that its weather radar was not showing the weather post-take-off.

On July 2, an SG-2962 SpiceJet flight from Delhi to Jabalpur was forced to return to the Delhi airport when the cabin crew spotted smoke inside the plane while flying at 5,000 feet. 

On June 19, an engine on the carrier's Delhi-bound aircraft, with 185 passengers on board, caught fire after a bird hit. Once again, it returned to base in an emergency landing minutes after taking off from the Patna airport. The same day, a Bombardier Q400 Dash 8 developed a cabin pressurisation issue after departing from Delhi. While gaining altitude, the pilots noticed that the cabin pressure was not building correspondingly and decided to turn around. 

On June 24, pilots flying the SpiceJet's Guwahati-Kolkata SpiceJet Q400 aircraft decided to turn back after seeing the fuselage warning light up. A day later, its Patna-Guwahati Q400 aircraft had to scrap its take-off roll at Patna airport after its fuselage door warning light lit up. 

On May 4, SpiceJet's Boeing 737 Max aircraft headed to Durgapur had to return to Chennai after one of the engines developed a snag mid-air. Another 737 Max plane, flying from Mumbai to Kolkata on December 9, 2021, also turned back to base after its engine encountered a technical issue.

Big Brother Starts Watching 

Worried about this spate of mishaps, on July 6, the Directorate General of Civil Aviation (DGCA) issued a show-cause notice to SpiceJet. Taking a stern view of the nine malfunction incidents over the course of two months, the regulator claimed that the airline had failed to "ensure safe, efficient and reliable air services" under the terms of the 11th Schedule and Rule 134 of the Aircraft Rules, 1937." 

Its show-cause notice stated that a "review of the incidents reveals poor internal safety inspection and lack of adequate maintenance measures resulting in loss of safety," and it gave SpiceJet three weeks to respond to the notice. 

"The financial assessment done by the DGCA in September 2021 also revealed that the airline is not making payments to the approved vendors by the safety-related suppliers on a regular basis leading to a shortage of spares and maintenance of aircraft," the notice further stated.

Sharing the show cause notice on his Twitter handle, Jyotiraditya M Scindia, Minister of Civil Aviation, tweeted, "Passenger safety is paramount. Even the smallest error hindering safety will be thoroughly investigated & course-corrected."

On July 6, SpiceJet released a statement stating it was "committed to ensuring a safe operation" and promised to respond to the investigation within the specified time frame. "We are an IATA-IOSA certified airline. SpiceJet successfully completed a meticulous audit program for re-certification in October 2021. We have been regularly audited by DGCA. All our aircraft were audited by the regulator a month ago and found to be safe. All SpiceJet flights follow DGCA norms," the statement said. 

 A Growing Mound Of Troubles

This is not the only time SpiceJet has run foul with DGCA. On May 30, 2022, PTI reported that the regulator had imposed a Rs 10 fine on SpiceJet for training its Boeing 737 Max aircraft's pilots on a faulty simulator, which could have adversely impacted flight safety. A month before, DGCA had barred 90 SpiceJet pilots from operating the Max aircraft after finding they were not properly trained.

SpiceJet's challenges were not limited to its airlines but spilt into its IT systems as well, which were hit by a ransomware attack in May, forcing the company to reschedule its board meeting on May 30 to consider the March quarter earnings.

"We wish to inform you that we are expecting a delay in submission of audited standalone and consolidated financial results of the Company for the financial year ended March 31, 2022…due to ransomware attack on our IT systems which has affected the completion of the audit process within the stipulated time," the firm said.

These troubles are reflected on the carrier’s share prices. Its share price returns on BSE declined by 17.57 over the past month and by 33.13 over the past 3 quarters. On 6 July, PTI reported that its shares continued to fall, declining 7 per cent to hit its one-year low level, amid multiple instances of its planes suffering technical glitches in recent weeks. The scrip tanked 7 per cent to hit its 52-week low of Rs 35 on the BSE last Wednesday and is currently at Rs 38.50.

(With inputs from agencies)

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