SpiceJet’s mounting incidents of malfunctions shake customer confidence

Representative Image

With SpiceJet making the headlines for the wrong reasons after a series of incidents recently, passengers are starting to lose faith in the budget carrier, a survey showed.

About 44 percent of Indians traveling on domestic air routes said they were avoiding SpiceJet flights over safety concerns, a survey conducted by Moneycontrol and LocalCircles on July 6 and 7 showed.

SpiceJet reported at least seven technical malfunctions on its aircraft over an 18-day period, Moneycontrol reported on June 6. The malfunctions included a faulty fuel indicator, windshield cracks, smoke in the cabin, and non-working weather radar. India’s airline regulator has also issued a notice to SpiceJet over ‘poor safety oversight’.

The airline came in second in terms of flight cancellations in May and the average number of complaints per 10,000 passengers rose to 0.8 in May from 0.1 in February, according to the monthly report by the Directorate General of Civil Aviation (DGCA).

“In June, there has been a rise in passengers inquiring about options to reschedule their SpiceJet flights with other domestic airlines,” an official from online travel agent Yatra.com told Moneycontrol.

He added that while customers have not followed through on cancellations or rescheduling due to increased costs, the fact that such queries have risen in the past few months should be a cause for concern for the airline.

‘Absolutely safe’

SpiceJet said in response to queries sent by Moneycontrol that its flights were absolutely safe and that the safety of its passengers, crew and aircraft is paramount to them. It added that the airline reported the highest load factor – an indicator of seat occupancy on flights – for more than 30 consecutive months, which shows it is the most preferred and trusted carrier in the country.

“The DGCA had only last month audited all our aircraft and found them to be absolutely safe,” a SpiceJet spokesperson said.

SpiceJet shares have declined 33.5 percent over the past three months on the BSE.

A DGCA review found poor internal safety oversight and inadequate maintenance action by SpiceJet. Suppliers and approved vendors were not paid on a regular basis. The DGCA review also showed a shortage of spares and the airline operating on a cash-and-carry mode.

Local travel agents have become skeptical about recommending SpiceJet to their customers.

“In the last few months, many SpiceJet flights have been canceled or delayed, which has led to complaints from customers about our travel packages,” an executive from New Delhi-based Swan Travels said.

He added that while the airline offers cheaper tickets than some of its competitors, there is a rising fear among customers of flights being canceled.

An official from Ess Ess Tours & Travels said that in February, a Pune-to-Tirupati SpiceJet flight with a tour group of 10 people scheduled to visit the Venkateswara Temple was cancelled at the last minute.

SpiceJet has also been struggling with payments to lessors over the last few months. On May 20, six of its flights were delayed because it hadn’t cleared payments in advance. The airline attributed the payment delays to an attempted ransomware attack on the night of May 19.

The Airports Authority of India has put SpiceJet on a cash-and-carry mode, which requires it to make daily payments for facilities provided at airports.

The airline’s accumulated losses stood at Rs 5,478 crore at the end of December, while liabilities exceeded assets by Rs 6,347 crore.

SpiceJet has deferred announcing its earnings for the quarter ended March, citing the ransomware attack. The steep rise in fuel prices over the past few months is expected to further hurt the airline’s financials.