SpiceJet, once a rising star in India’s low-cost aviation segment, now finds itself struggling to keep the wheels turning as financial pressures mount.
The airline has delayed salary payments for its senior management staff, an unsettling sign of liquidity distress that underscores deeper structural challenges. In August 2025, while employees earning up to ₹55,000 received their salaries on time, those in assistant manager roles and above faced delays stretching between 10 and 15 days. The move, reported by the Press Trust of India, has exposed the airline’s increasing vulnerability at a time when safety incidents, grounded planes, and governance questions dominate headlines.
This latest development reflects a pattern of long-standing financial woes that have dogged SpiceJet for years. The airline’s troubles date back to March 2019, when the entire fleet of Boeing 737 MAX aircraft was grounded globally after two fatal crashes. At the time, SpiceJet had over 100 MAX aircraft on order, and the grounding forced it to rely on older, less efficient planes. Just months later, the Covid-19 pandemic struck, further collapsing air travel demand and putting the industry under immense pressure. Despite managing to pivot into cargo services via SpiceXpress, these measures provided only temporary relief.
The situation has worsened in recent quarters. SpiceJet reported a net loss of ₹234 crore for Q1 FY26, a sharp reversal from a ₹158 crore profit in the same quarter last year. Revenues fell by 34.4% year-on-year, from ₹1,708 crore in Q1 FY25 to ₹1,120 crore, largely due to grounded aircraft and disrupted demand, exacerbated by geopolitical tensions. At the same time, operating costs remain elevated, and capacity constraints limit the airline’s ability to capitalize on market recovery. As of mid-September 2025, the operational fleet had dwindled to fewer than 20 aircraft, from a sanctioned fleet size of 53.
The salary delays are a visible symptom of the underlying liquidity crunch. Analysts point out that postponing payments to senior employees risks not only morale but operational efficiency. In the hyper-competitive Indian aviation market, dominated by IndiGo and a resurgent Air India, such practices threaten to erode confidence among investors and staff alike.
Compounding the problem are unsettling revelations about the airline’s governance. The FY25 annual report disclosed an interest-free ₹32 crore advance taken by Ajay Singh, SpiceJet’s Chairman and Managing Director, which was later adjusted against his salary. While the airline insists this was board-approved and in shareholders’ best interest, the optics are hard to dismiss. Observers argue that prioritizing advances to promoters while delaying payments to management raises serious questions about financial priorities and governance standards.
SpiceJet has, in recent years, attempted to present a narrative of recovery. The airline undertook several steps to improve its balance sheet. In September 2023, the promoter infused ₹500 crore, and in February 2024, SpiceJet raised ₹636.5 crore from domestic institutional investors and high-net-worth individuals. The most significant capital raise came in September 2024, when the airline garnered ₹3,000 crore via a Qualified Institutional Placement from prominent financial institutions including Goldman Sachs and Morgan Stanley.
A key focus of this capital infusion was to revive the fleet and settle legacy dues. Indeed, the airline repaid a $24 million debt to Credit Suisse in August 2025 and successfully settled long-standing disputes with lessors. Some aircraft that had remained grounded for over three years were finally ungrounded. SpiceJet also repaid statutory dues and managed to secure a restructuring of $121 million lease debt through equity issuance in mid-2025.
Despite these efforts, the mismatch between ambition and reality persists. Of the 15 overhauled engines expected to rejoin the fleet, only two were delivered by July 2025. The airline now aims to reach a 52-aircraft operational fleet by December 2025, but delivery delays and lessor disputes continue to hold it back. The addition of five Boeing 737 MAX planes is slated for October, signaling intent but not immediate impact.
Safety concerns further complicate matters. Recent incidents—a Q400 turboprop losing an outer wheel during take-off, and a Boeing 737-8 facing a suspected tailpipe fire—have raised questions about operational rigor. Though both flights landed safely, the timing could not have been worse, coinciding with the financial turmoil and salary delays. Industry consultants warn that safety lapses, however minor, combined with financial distress, erode customer trust and regulatory confidence, critical factors for survival.
SpiceJet’s management insists the airline is turning the corner. Promoters have pumped in over ₹4,000 crore over the past two years, and the narrative is shifting from legacy debt to future growth. The airline highlights its strong 90% load factor in FY24, which points to a recovering market appetite. But without visible progress in fleet augmentation, sustainable operating profits, or improved governance, the turnaround remains tentative.
The next six months will be critical. Failure to resolve salary delays, unground additional planes, or restore investor confidence risks sliding SpiceJet back into existential crisis. As it stands, the airline is caught in a delicate balancing act: managing the present liquidity crunch while promising a future rebound. Whether it can do both remains an open question.
