SpiceJet Falls Below Star Air: Why Does Its Turnaround Keep Stalling?

How small has SpiceJet become?

For every 1,000 passengers flying within India in September, roughly six travelled with SpiceJet.

The airline’s domestic market share fell to 0.6%, below regional carrier Star Air’s 0.7%. SpiceJet carried approximately 73,000 passengers, compared with 5.92 lakh in January. That represents a fall of about 88% in monthly passenger numbers.

The figures measure passengers carried, rather than aircraft owned or destinations advertised. They show how much of India’s domestic flying business SpiceJet is actually serving.

Its share had been about 15% at the end of 2019. The question is how an established national airline has become such a marginal presence, despite repeated efforts to restore it.

IS THE WHOLE AVIATION MARKET STRUGGLING?

September was weak across the industry. Domestic passenger traffic fell approximately 6.5% year-on-year to 1.18 crore.

But SpiceJet’s retreat was much sharper. Its share halved from August’s 1.2%, while IndiGo’s rose to 65.4% and the Air India Group’s reached 26.8%. Together, those two groups carried 92.2% of domestic passengers.

A weaker market can explain some pressure on demand. It cannot adequately explain why one airline is losing ground so rapidly within that market.

SpiceJet’s problems involve its ability to supply flights as well as persuade passengers to book them.

WHY ARE GROUNDED AIRCRAFT SO DAMAGING?

An aircraft earns revenue by flying. Grounding it does not necessarily eliminate its costs.

Depending on contracts and circumstances, lease obligations, maintenance requirements and other expenses can continue while ticket revenue disappears. Returning an aircraft to service can require engines, parts, maintenance slots and payments to suppliers.

SpiceJet’s financial disclosures repeatedly identify grounded-fleet expenses as a burden.

That creates a difficult cycle. Limited cash constrains restoration. Fewer available aircraft restrict revenue. Persistent expenses consume money that could otherwise support the recovery.

A fleet listed on an operating permit therefore tells only part of the story. The commercially important number is how many aircraft are serviceable and flying consistently.

DIDN’T SPICEJET ALREADY RAISE THOUSANDS OF CRORES?

Yes. A media report in July, examining the exchange disclosures, found that a qualified institutional placement and a preferential issue had brought in ₹3,678.19 crore from external investors. By December 2025, ₹3,578.05 crore had been utilised.

Much of the money went towards existing obligations. Reported spending included ₹601.5 crore on statutory dues, ₹898.87 crore on lessors, financiers and engineering vendors, and ₹336.07 crore on restoring grounded aircraft and fleet maintenance.

Settling old bills can be necessary to keep an airline operating. But money used to repair the past is not all available to fund expansion.

SpiceJet recently underlined in an interview that the capital had helped stabilise its balance sheet, resolve disputes and support fleet restoration. It also cited engine availability and maintenance-capacity constraints.

The test is whether those payments eventually produce sustained flying capacity.

WHAT DO ITS FINANCIAL RESULTS SHOW?

The December 2025 quarter illustrates both the possibility of recovery and its limits.

SpiceJet’s company presentation reported revenue from operations of ₹1,384 crore, up from ₹781 crore in the preceding quarter. It said capacity increased after aircraft additions, and passenger load factor reached 90%.

Nevertheless, its stated net loss after foreign-exchange adjustments and the one-time labour-code impact was ₹268 crore, compared with ₹635 crore in the previous quarter.

The comparison needs care. Revenue rising 77% quarter-on-quarter is different from growing 77% over the corresponding quarter a year earlier.

Likewise, filling 90% of available seats does not establish that an airline is profitable. A reduced schedule can attract strong occupancy while the business still carries substantial costs elsewhere.

These are historical results. September traffic figures should not be presented as though they come with an equally current published profit-and-loss account. Later financial statements are needed to establish today’s full position.

WHAT ABOUT DELAYS AND CANCELLATIONS?

September’s operational figures deepen the concern.

DGCA data reported by Financial Express put SpiceJet’s on-time performance at 16.6%, compared with IndiGo’s 91.1% and Akasa Air’s 90.8%.

Its cancellation rate was reported at 20.29%, against an industry average of 1.15%.

On-time performance covers the airports included in the regulator’s monitoring system. It should not be described as a measurement of every flight everywhere.

Even with that qualification, reliability is central to the turnaround. A passenger choosing an airline considers the likelihood of reaching the destination when promised.

A small fleet can also leave less room to absorb an aircraft becoming unavailable. Operational disruption can then make the commercial recovery harder.

WHY DOES SPICEJET KEEP APPEARING IN COURT?

Aircraft lessors have pursued the airline over unpaid obligations, including through insolvency petitions.

In August, the National Company Law Tribunal ordered remaining petitions to be heard afresh after a last-minute settlement led to one petition’s withdrawal and a panel member’s retirement complicated delivery of the prepared judgment.

That gave SpiceJet breathing space. It did not establish that every creditor dispute had been resolved.

A petition seeking insolvency proceedings is also different from an order admitting the company into insolvency.

For the airline, settlements can reduce immediate pressure. For creditors, the important question is whether agreed payments arrive. For passengers, the consequences become relevant when financial disputes affect available aircraft or operations.

HAS THE REGULATOR INTERVENED?

The government said in September that SpiceJet was under operational and financial scrutiny amid its continuing cash-flow problems.

Reuters also reported delayed pilot salaries and government-backed credit support.

Financial scrutiny should not automatically be described as a finding that the airline is unsafe. The regulatory task is to ensure that commercial distress does not compromise required operating standards.

For a recovery, access to money must be accompanied by enough resources to maintain the aircraft, staff and systems needed to operate reliably.

CAN LEASED AIRCRAFT REVERSE THE DECLINE?

They can help restore capacity more quickly.

Another media report recently underlined that four wet-leased Airbus A321s had arrived and begun passenger services, with four Boeing 737-800s expected to follow. It also reported earlier Airbus A320 additions.

A wet lease supplies an aircraft with crew, maintenance and insurance. It can bridge a shortage while an airline works on its own fleet.

But additional aircraft bring additional commitments. The airline must deploy them on routes where revenue can cover operating costs and support the wider business.

Announced leases, arrived aircraft and sustained profitable flying are successive stages. Investors and passengers need evidence of the last one.

HAS SPICEJET BEEN HERE BEFORE?

In December 2014, its aircraft were briefly grounded after fuel suppliers stopped refuelling them. Ajay Singh subsequently returned to lead its revival.

That history explains why another recovery remains conceivable. It cannot establish that the present challenges will be overcome in the same way.

Today’s airline must rebuild within a market dominated by two much larger groups.

WHAT WOULD A REAL TURNAROUND LOOK LIKE?

The evidence would extend beyond a funding announcement.

SpiceJet needs a consistently available fleet, fewer cancellations, better punctuality, honoured payment commitments and current financial accounts showing how operations are being funded.

Market share could recover as those improvements translate into more completed flights. Pursuing share without sustainable economics would leave the underlying problem unresolved.

September’s 0.6% is the visible result of a much longer struggle. SpiceJet’s next comeback has to appear in its operations as convincingly as it appears in its plans.