21 years of SpiceJet – a testament of resilience or a story of repeated missteps?

In the hyper-competitive skies of Indian aviation filled with tumbling skeletons, surviving for more than two decades is an achievement reserved for a very selective few. SpiceJet will complete 21 years of operations on May 24, 2026. The only private carrier that has lasted longer has been Jet Airways which went down in its 25th year of operations. Air India, though privatised, has had a legacy of both private and government ownership. For an airline which has its roots in Modiluft, part of the very first attempt at liberalisation of aviation in India, the only way the airline can be described is “miraculous”, with a recurring theme of near-death and survival alternating over the last many years.

SpiceJet’s DNA dates back to 1995 when industrialist S.K.Modi established ModiLuft in partnership with Lufthansa, as an air taxi operator. The airline suspended operations in 1996, with Jet Airways and Air Sahara being the only two carriers to continue operating into the next decade. ModiLuft was resurrected from a defunct company to relaunch as SpiceJet in 2005.

New beginnings

SpiceJet entered the market with a classic no-frills, low-cost carrier model. A single type of aircraft in the form of B737, high utilisation rate, aggressive pricing being the core areas of focus. The airline started naming each of its planes after a Spice and passengers were amused to see Fennel, Cinnamon or Coriander written on the aircraft. The early years were defined by rapid growth, even as Jet Airways and Kingfisher Airlines struggled with their respective acquisitions of Air Sahara and Air Deccan, with the aviation industry facing headwinds of the financial collapse of 2008-9. In 2010, having completed five mandatory years of domestic operations, SpiceJet hit a critical milestone: permission from the DGCA to launch international routes. The airline expanded its wings beyond Indian borders, launching flights connecting Delhi to Kathmandu and Chennai to Colombo.

Ajay Singh – Maran era – Ajay Singh

In June 2010, Indian media baron Kalanithi Maran, the billionaire chairman of the Sun Group, bought a controlling 37.7% stake in SpiceJet for roughly ₹750 crore (later scaling it up to over 53%). Maran’s deep pockets promised a new era of aggressive capital deployment. Under Sun Group’s leadership, the airline deviated from its strict single-aircraft policy. In late 2010, SpiceJet placed a major order for 30 Boeing 737-800s for high-density trunk routes, alongside a secondary order for 15 Bombardier Q400 turboprop aircraft. The strategy was to use the smaller, short-haul Bombardiers to aggressively conquer Tier-II and Tier-III cities with shorter runways. The management saw a churn, but the dual fleet broke the fundamentals of the low-cost model. The macroeconomic shocks between 2012 to 2014 saw a dramatic rise in operational costs. This period also saw Kingfisher Airlines shut down and Jet Airways got stronger with funding from Etihad.

By late 2014, SpiceJet was bleeding cash. The management had deferred payments to lessors, vendors, and the government to preserve basic working capital. The crisis peaked in December 2014. Oil marketing companies refused to refuel SpiceJet aircraft on credit, forcing the airline to temporarily ground its entire fleet. With over ₹2,000 crore in liabilities, thousands of stranded passengers, and empty coffers, SpiceJet was on the exact same trajectory that had shut down Kingfisher Airlines just two years prior. Ajay Singh returned to the airline, buying the airline from Maran’s to whom he had sold it earlier. The airline started with renegotiating contracts, route optimisation, rebranding and more. The turnaround was incredibly swift. Within two quarters of Singh taking the helm, SpiceJet swung from massive losses to record-breaking quarterly profits. Armed with newfound cash flow and surging market confidence, Singh made a bold statement of intent at the beginning of 2017: a massive, headline-grabbing firm order with Boeing for up to 205 B737 MAX aircraft, valued at over $22 billion. The first of the planes had landed, named King Chilly with the additional range enabling the airline to start operations from Hong Kong from Delhi.

Double blow

In October 2018, SpiceJet inducted the first MAX 8 aircraft. The same month, a MAX 8 crashed near Jakarta. Within months, in March 2019 another one crashed in Ethiopia, which led to the grounding of the type. SpiceJet’s entire transformation was based on rapid induction of the MAX 8 and working on the Sale and Leaseback model, which IndiGo had till then made a benchmark in Indian skies.

In March 2019, MAX 8 fleet was grounded as part of global grounding. The next month, an opportunity arose like no other. Jet Airways went down after almost 25 years of service. The lessors were more than willing to transfer the aircraft in India and the Indian government linked the expansion to capacity induction. SpiceJet jumped on that opportunity, inducting over 30 aircraft in quick succession, with the crew being available quickly. The market share was rising, almost back to the 2014 levels in terms of passengers carried, until the next disruption happened, the COVID-19 pandemic. The sudden increase in fleet and human resources put a strain on the airline’s finances like never before and the crisis remained its biggest, one from which it is yet to recover. The airline started a cargo division named SpiceXpress, converted passenger planes to carry freight, started air ambulance service and while it helped the airline stay afloat with the help of an economic lifeline from the government, a comeback remained distant.

On the other side of the pandemic, SpiceJet has remained buried under a mountain of liabilities, some of which have been settled out of court, while some continue to be contested in the court of law. Innovative measures like converting debt to equity for lessors have had little impact as one or the other issue has kept the airline in the news. In late 2024, the airline saw a QIP of INR 3000 crore, which hasn’t helped the airline tide over the crisis. Fleet restoration has faced head winds due to supply chain issues, and legal issues continue to linger with one of them being against the Marans and KAL Airways, the entity of Marans.

Tail note

Completing 21 years of operations is a monumental achievement for SpiceJet. However, it is in contrast to what market leader and rival IndiGo has scaled in one less year of operations. SpiceJet and IndiGo were neck to neck once upon a time. Today, IndiGo is 16 times the size of SpiceJet by scale. The airline’s history may be a testament of corporate resilience; while competition faltered, the airline can’t always be in a financial distress mode with multiple episodes of coming back from the brink.