Indian budget airline SpiceJet is struggling financially and has been ordered by a court to pay $12 million to its former owner. The airline said it would honor the court order, but it is unclear how it will raise the money.
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SpiceJet has been hit by a number of challenges in recent years, including rising fuel costs, intense competition from other airlines, and a grounding of a quarter of its fleet due to unpaid lease payments. The airline also lost an arbitration case in 2018 and was ordered to pay $70 million plus interest to its former owner, Kalanithi Maran.
SpiceJet reported its highest quarterly profit in four years in July, but the company said the profit was due to a sharp drop in expenses, not an increase in revenue. The airline is still struggling to raise funds and restore operations for its grounded planes. The situation at SpiceJet is a reminder of the challenges facing budget airlines in India. The sector is highly competitive and the cost of fuel is rising. The grounding of SpiceJet's planes is also a setback for the airline, as it will make it more difficult to compete with other airlines.
The future of SpiceJet is uncertain. The airline has said it is working to raise funds and restore operations, but it is unclear if it will be able to do so. If SpiceJet is unable to turn around its business, it could be forced to file for bankruptcy, like its rival Go First.