The Directorate General of Civil Aviation (DGCA) has extended flight restrictions on SpiceJet while keeping the budget carrier under "enhanced surveillance" till October 29, 2022.

This comes weeks after the DGCA issued a show cause notice to the low-cost carrier, saying that on numerous occasions SpiceJet aircraft either turned back to its originating station or continued landing to the destination with degraded safety margins. In its interim order in July, DGCA said that the airline failed to establish a safe, efficient, and reliable air transport service under the aircraft rules.

The aviation regulator had on July 27 restricted the number of departures of SpiceJet to 50% of the number of departures approved under summer schedule 2022 for a period of eight weeks.

While the DGCA said its latest review has indicated that there is appreciable reduction in the number of safety incidents, the regulator decided that the restrictions imposed in July shall continue to be in force till the end of summer schedule as a matter of "abundant caution."

"Any increase in the number of departures beyond 50% of the total number of departures approved under the summer schedule 2022, during this period, shall be subject to the airline demonstrating to the satisfaction of DGCA that it has sufficient technical support and financial resource to safely and efficiently undertake such enhanced capacity," the aviation watchdog says.

Meanwhile, SpiceJet has sent about 80 pilots on leave without pay for about three months in order to "rationalise cost."

The comes at a time when the airline's domestic market share has declined from 8% in July to 7.9% in August.

Net loss of Ajay Singh-led SpiceJet widened to ₹789 crore in the first quarter of 2022-23 as business was severely impacted by record high fuel prices and a depreciating rupee. SpiceJet, which delayed the financial result for Q4 FY22 due to ransomware attack on its systems, reported a net loss of ₹458 crore for the quarter ended March 31, 2022 against ₹235.3 crore in the year-ago quarter.

Earlier this month, the airline's board approved fresh capital infusion of up to $200 million. "We are optimistic about our future and our continued recovery and in order to achieve our future plans the Board has mandated fresh capital issuance and the company will be shortly engaging with investment bankers for a potential raise of up to US $200 million," said SpiceJet chairman and managing director Singh.

"The industry has been witness to one of the most severe operating environment in the recent past which impacted the progress and recovery made in Q3FY2022. Record high ATF prices and depreciating Rupee were the major contributors. Despite the complex operating environment and highest ever input costs, SpiceJet has been able to sustain its operations with the confidence shown by our partners and passengers," Singh said, adding that the carrier will soon conclude the hive-off its cargo business into a separate independent company, SpiceXpress in the ongoing quarter which will be followed by capacity enhancement with additional freighter aircraft within FY23.

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