Gurugram-based SpiceJet has partnered with the US-based FTAI Aviation to restore the fleet under the CFM6 revitalisation programme, the company said in a statement on Thursday. The development comes days after the beleaguered airline unveiled its plans to borrow around ₹400 crore to revive 25 grounded aircraft.
Under the revitalisation programme, FTAI will provide SpiceJet with up to 20 engines for lease, inclusive of maintenance services. "By leveraging FTAI Aviation's engine expertise, SpiceJet will have access to a pipeline of available engines which eliminates the need for frequent shop visits. The revitalization program will reduce maintenance expense and minimize aircraft downtime, enhancing the airline's overall performance," the company said.
The first engines will be used to support the re-activation of SpiceJet's aircraft fleet over the next 2-3 months and will be critical for service on new routes. "With FTAI Aviation managing the engines, SpiceJet will strengthen its resource allocation and focus on delivering an exceptional travel experience while maximizing its operational potential," the company said.
According to the company, SpiceJet aims to demonstrate its creativity and dedication to advancing the future of low-cost air travel and the aviation industry in India, through the CFM56 revitalisation programme.
"SpiceJet is slowly but surely progressing towards its goal of restoring its fleet and ensuring that our aircraft stay where they rightly belong to i.e. in the skies serving our passengers. Our partnership with FTAI Aviation is a step forward in that direction that would ensure that our fleet is up and running at all times without us worrying about engines or their maintenance. Quick and ready replacements will ensure that our planes are on the ground for a minimal time," said Ajay Singh, Chairman and Managing Director, SpiceJet.
Following the development, shares of SpiceJet surged as much as 8.3% on Thursday to hit an intraday high of ₹29 apiece on the BSE. The scrip opened marginally higher at ₹26.81 as against the closing price of the previous session at ₹26.76. At 1:40 pm, the share price of SpiceJet was trading 5.16% higher at ₹28.15. At present, SpiceJet's shares are trading 46.2% lower than the 52-week high of ₹52.40, which the company touched on August 3, last year. The share price is trading 28% higher than the 52-week low of ₹22.65, which the company touched on May 23. During the session, the airline's market capitalisation stood at ₹1,695.40 with 50,12,940 shares exchanging hands on the BSE as against the two-week average of 14.53 shares.
Last month, the company said that the funds for the revival of its 25 grounded planes will be drawn from the government’s Emergency Credit Line Guarantee Scheme (ECLGS) and better cash accruals.
The Gurugram-based airline operates a fleet of Boeing 737s and Q-400s and is one of the country's largest regional players operating multiple daily flights under UDAN or the Regional Connectivity Scheme.
The low-cost airline's market share stood at 6.9% during the January-March quarter, marginally behind rival Go First which cornered a market share of 7.8% for the first three months of 2023.
SpiceJet recently restructured over $100 million outstanding dues to Carlyle Aviation Partner into equity shares and compulsorily convertible debentures (CCDs). Carlyle Aviation, an aircraft lessor, is the commercial aviation investment and servicing arm of private equity giant Carlyle. Following the transaction, Carlyle Aviation will hold over 7.5% equity stake in the airline.