SpiceJet’s meltdown: Rs 5,500 crore raised, but where did the money go?

In the last few weeks, SpiceJet has been wracked by cancellations, inordinate delays and growing customer discontent. This confirms what the aviation industry has been anticipating for most of this year: a SpiceJet meltdown.

In Sept-Oct, daily scheduled flights were down to fewer than 5, operating on a cash-and-carry basis. This, even though for most of the past 2 yrs, chairman-MD Ajay Singh kept claiming that the airline was working towards a fleet of 100 aircraft. Contrary to his claims, the airline's air operator certificate (AOC) at end-October showed a registered fleet of over 20, although only 11 of these were operational.

On Sept 22, the airline was put, rather belatedly, under financial scrutiny by DGCA, which appears to have turned a blind eye to the carrier's mounting crisis amid growing safety concerns arising from the tightening liquidity position and paucity of engineering staff. Meanwhile, there have been accusations of flouting rules and norms, including selling forward inventory and collecting money in advance for flights cancelled at the last minute, not meeting route dispersal guidelines, and failing to publish the latest results as per Sebi requirements for a listed company.


Civil aviation ministry, apprehensive of the wider implications of yet another airline bankruptcy and closure, reportedly gave the carrier a long rope, even at the cost of safety. The way events have unfolded has left the aviation sector seeking answers that only authorities can provide.

The latest numbers were not available as SpiceJet was no longer filing its results as per Sebi requirements, but total accumulated losses reportedly crossed ₹9,000 cr, with dues exceeding ₹6,000 cr. Roughly ₹600-650 cr in statutory dues is estimated to be unpaid, including liabilities for TDS, EPF and GST. Following its Q2 FY26 financial disclosures for the quarter ended September 2025, the airline reported a negative net worth of ₹2,800 cr.

So, what happened to the nearly ₹5,500 cr raised by the airline over the last few years? Fresh capital infusions have taken place from time to time, all of which seem to have vanished. In 2023, SpiceJet restructured over $100 mn in dues to Carlyle Aviation Partners, converting a significant portion into a 7.5% equity stake for the lessor.

In Jan 2024, the airline raised ₹744 cr as part of a larger plan to raise over ₹2,250 cr. It also accessed Emergency Credit Line Guarantee Scheme (ECLGS) during and after the pandemic, and received about ₹1,000 cr under the revised scheme in late 2022 to address concerns about its survival. Then, in Sept 2024, the company managed to raise ₹3,000 cr through a QIP.

Despite raising more than ₹5,500 cr in the last few years, the company was apparently staring at zero cash reserves and bankruptcy. It had even reportedly told the courts that it was waiting for more ECLGS funds to pay what it owes to its former controlling stakeholder and Sun Group chairman Kalanithi Maran and his investment vehicle KAL Airways. This practically amounts to asking GoI to settle its bills!

Further, as in the past, allegations of money laundering and siphoning of funds by the airline's management continued to persist. Industry sources were of the view that ED and other investigating agencies needed to step in to take a closer look at the deployment of funds raised in recent years to resuscitate the business.

What has raised eyebrows further is that even as Singh grapples to keep the airline afloat, he launched SkyHop, a family-owned and -run enterprise expected to launch seaplane services. It was scheduled to launch in Lakshadweep on Sept 16, but the launch was halted after the UT's administration withdrew its approval just days before.

The venture's initial paid-up capital was provided by its promoters even as their primary business was going bankrupt. Questions have arisen as to where the funds for this new venture are coming from.

As has been the case with almost every airline in India that has gone bankrupt, promoters and founders have seen an unexplained rise in personal net worth even as their businesses went broke. Turning a blind eye can have severe implications for India's civil aviation industry.