Indian carriers warned not to fleece stranded SpiceJet passengers

NEW DELHI, India – The Directorate General of Civil Aviation (DGCA) has directed all Indian carriers to accept passengers of SpiceJet’s cancelled flights without charging exorbitant spot fares. The regulator’s order is “subject to availability” of seats in other carriers and refers to passengers of SpiceJet flights cancelled at the last minute.

“Spot fares are very high, especially in this peak travel season. We have asked airlines to charge a reasonable fare from passengers of SpiceJet’s flights that have been cancelled at the last minute,” said a senior official.

“After the Kingfisher experience, other airlines do not want to accept vouchers from SpiceJet as they are unsure of getting money from them. Hence passengers will have to pay other airlines to take their flight and get a refund from SpiceJet for the cancelled flight later,” said the official.

Former SpiceJet promoter Ajay Singh — who is eying re-entry into the airline by pumping in Rs 1,200-1,500 crore along with a bunch of global PE funds — is understood to have arranged funds for the low-cost carrier to keep flying without any more hiccups. “Ajay Singh is doing a due diligence of SpiceJet and that process will take about a month. But Singh has arranged for funds for the airline to keep operating till he and his PE funds invest in the airline,” said a source.

Airline industry insiders believe Singh has finalized his share purchase price with Sun Group chief Kalanithi Maran. “While Maran wants to exit SpiceJet completely, Singh has reportedly told him that the airline needs money more urgently. So, Maran will have to wait for a while before the investors buy out his over 58% stake in the LCC completely,” said a source.

Singh has identified some key mistakes made by Maran after taking over the airline in 2010. Among the first changes could be phasing out of the expensive-to-maintain Bombardier Q400s that Maran inducted into the SpiceJet fleet, which earlier had only Boeing 737s. Also, a change in the management team could be on the cards.

“Maran ran SpiceJet through a team of trusted Sun Group officials, who had no clue of the airline business and led SpiceJet to the ground. Ajay Singh, on the other hand, has first-hand experience of running an airline successfully and will be able to turn around SpiceJet,” said a source.