Budget airline SpiceJet has taken a crucial financial step by settling all its Goods and Services Tax (GST) dues on Friday, just one day after resolving all outstanding salary arrears for its employees. As per reports, this significant move follows the airline's successful fundraising of ₹3,000 crore through a Qualified Institutional Placement (QIP) earlier this week.
The QIP attracted investment from several prominent institutional players, including Goldman Sachs (Singapore), Morgan Stanley Asia, Tata Mutual Fund, and Discovery Global Opportunity Ltd., highlighting robust investor confidence in SpiceJet's recovery strategy.
SpiceJet's Chairman and Managing Director emphasized the airline's commitment to financial responsibility, stating, "We are proud to have cleared all GST dues, a significant step towards reinforcing our commitment to financial discipline and regulatory compliance." He further added, "These developments reflect our commitment to providing exceptional service to our passengers while positioning ourselves strategically for the future."
Earlier, SpiceJet acknowledged an outstanding tax liability of approximately ₹220 crore related to tax deducted at source (TDS) from employee salaries between April 2020 and August 2023, which has now been rectified.
Additionally, the airline recently resolved a longstanding dispute with Engine Lease Finance Corporation (ELFC), which had filed a claim for $16.7 million. SpiceJet successfully reached an amicable settlement for a lower, undisclosed amount on September 24.
However, despite these positive strides, SpiceJet continues to encounter challenges in the competitive aviation market. Recent data from the Directorate General of Civil Aviation (DGCA) reveals a concerning decline in its market share. In January, SpiceJet held a 5.6% market share, which has since plummeted to 2.3% by August, down from a considerably higher 10.5% in 2021.
As SpiceJet navigates these financial and operational challenges, stakeholders will be watching closely to see how the airline adapts and positions itself for a more competitive future in the aviation industry.
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