India's aviation regulator places SpiceJet under operational, financial scrutiny

India’s aviation ministry has placed troubled carrier SpiceJet under operational and financial scrutiny following its long-running cash flow troubles, worsened by the ongoing Middle East conflict, a government official said on Tuesday.

Civil Aviation Minister Ram Mohan Naidu said the government was closely monitoring SpiceJet’s operations and finances through the aviation regulatory body to ensure safety is not compromised.

The ministry’s focus comes amid heightened attention on aviation safety in India after recent industry disruptions, with regulators keen to ensure financial stress does not affect operations or passenger safety.

Naidu said there were limits to how far the government could intervene in privately run businesses, but noted that authorities had extended the Emergency Credit Line Guarantee Scheme (ELGS), under which SpiceJet has received 1.5 billion rupees($15.67 million) in support.

The minister’s remarks at a press conference comes months after Reuters reported that the company was actively pursuing government funding after delaying salary payments to its pilots this year.

SpiceJet, which was one of India’s second-largest domestic carrier by market share in 2019, has struggled to deal with thinning market share, rising fuel costs, and intense competition.