BackDGCA objects to SpiceJet's promotional offer
The airline forced to withdraw its '1+1' promotional offer after objection from the regulator
PremiumNo-frill carrier SpiceJet Limited on Monday withdrew its promotional '1+1' offering after aviation watchdog The Directorate General of Civil Aviation (DGCA) objected to the airline's move.
The Gurgaon-based carrier had earlier offered discounted one-way base fares starting at ₹ 899, while also offering a free flight voucher worth the base fare of the booked flight for a limited period.
The five-day sale offer was launched on Monday and passengers could fly till 31 March next year on tickets brought under the scheme.
The DGCA has blocked the offer as the agency wanted to keep it simple for passengers, said an agency spokesperson.
A SpiceJet spokesperson said that the airline has withdrawn the offer after DGCA's objection.
"We have already complied with the DGCA directive." a SpiceJet spokesperson said.
Sources indicate that SpiceJet was rolling out such discounts, one of the quickest ways for airlines to raise capital during tough times, to generate cash.
"The goal for such an offering is to generate more revenue by getting the limited passengers to fly them rather than other airlines," said a senior industry source, requesting anonymity.
Auditors of SpiceJet Limited, S.R. Batliboi and Associates Llp, have raised doubts about the company’s ability to continue as a going concern as the no-frills airline reported its highest ever quarterly net loss of ₹807 crore for the March quarter.
"The company has incurred a net loss during the current and previous year and, its current liabilities exceeded its current assets in the balance sheet, till date. These conditions...indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern," said S.R. Batliboi and Associates Llp. The auditors have been raising similar concerns about the airline during the past quarters.
Indian airlines are staring at a revenue loss of ₹1.3 trillion between fiscal 2020 and 2022 due to the ongoing covid-19 pandemic that has severely hit demand, rating agency Crisil said in a report in July.
Airlines are also unlikely to recoup from this loss and bounce back to pre-pandemic levels of double-digit growth at least in the medium term, said the report.
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