SpiceJet Faces Wider Q2 Loss as Rupee Weakens and Grounded Fleet Hampers Operations in India’s Aviation and Tourism Sector

Published on November 12, 2025

India’s aviation and tourism sectors witnessed turbulence as SpiceJet, one of the country’s prominent low-cost carriers, reported a significant financial setback in the second quarter of the 2025–26 fiscal year (Q2 FY26). The airline’s consolidated net loss widened to ₹621.5 crore, marking a 36% increase compared to the same period a year earlier. The financial strain was primarily attributed to the depreciation of the rupee, grounded aircraft, and airspace restrictions impacting several domestic and regional routes. The volatile foreign exchange environment added further pressure to operational costs, especially as aviation fuel and lease payments are largely dollar-denominated. Despite these challenges, SpiceJet’s management, led by Chairman and Managing Director Ajay Singh, expressed optimism about a turnaround in the latter half of the fiscal year. The airline’s ongoing efforts in fleet expansion, maintenance clearance, and network revival are expected to strengthen India’s air connectivity and boost travel and tourism prospects across the country.

Financial Performance and Core Challenges

The financial results of SpiceJet Ltd for the September quarter of FY26 painted a picture of continued stress in India’s aviation ecosystem. The airline’s consolidated net loss of ₹621.5 crore represented a 35.6% year-on-year increase, underscoring the persistent operational and macroeconomic challenges confronting the carrier. The airline attributed its weak performance to three major factors — the sharp depreciation of the rupee, a large proportion of grounded aircraft, and restricted airspace around key travel corridors.

A substantial part of the financial strain stemmed from foreign exchange losses. During the September quarter, SpiceJet incurred a foreign exchange loss of ₹49.33 crore, a sharp rise compared to ₹7.44 crore in the same quarter of the previous fiscal year. This loss was mainly caused by the revaluation of lease liabilities as the rupee weakened against the US dollar, reflecting the heavy impact of global currency fluctuations on Indian carriers. With aircraft leases, spare parts, and fuel purchases tied to dollar-based contracts, the rupee’s decline intensified cost burdens for the airline.

Impact of Grounded Aircraft and Operational Restrictions

The airline’s operational efficiency was further weakened by the high number of grounded aircraft. Data from planespotters.net indicated that out of SpiceJet’s 65-plane fleet, about 35 aircraft were grounded due to pending maintenance and supply chain delays, while only 30 remained in active service. This reduced operational capacity constrained route frequency, affected seat availability, and ultimately limited revenue from both business and leisure travelers.

In addition to technical issues, airspace restrictions across certain regions of India also disrupted the carrier’s flight schedules. These restrictions, introduced for security and infrastructure reasons, curtailed the movement of flights across some heavily trafficked sectors, thereby affecting the airline’s route profitability. The combination of grounded planes and restricted flight paths had a domino effect on the airline’s reliability metrics and customer experience, impacting not only business operations but also the broader travel and tourism flow in India.

Market Context and Industry Comparison

The adverse currency environment has not only impacted SpiceJet but has also affected other Indian carriers operating in the aviation and tourism industry. Earlier in November, IndiGo, India’s largest airline by market share, reported a 161.6% increase in its consolidated net loss for the same quarter. The airline cited rupee depreciation and foreign investment outflows as major factors behind its losses. This reflects a broader trend in which Indian airlines, already operating on thin margins, face intensified cost pressures due to global economic volatility and the rising dollar.

For carriers such as SpiceJet, where international operations and aircraft lease payments are highly dependent on foreign currency, even minor fluctuations in exchange rates can translate into significant financial strain. Additionally, the ongoing volatility in aviation turbine fuel (ATF) prices continues to exert pressure on the entire sector, reducing profit margins and limiting expansion capabilities.

SpiceJet’s Strategic Roadmap for Recovery

Despite the short-term financial turbulence, Ajay Singh, Chairman and Managing Director of SpiceJet, described the September quarter as a phase of consolidation and preparation for future growth. The airline has embarked on a strategy centered on fleet revival, route expansion, and cost optimization. Aircraft additions are underway, aimed at replacing grounded planes and increasing operational efficiency across both domestic and regional routes. The reactivation of grounded planes is expected to enhance connectivity across India’s key tourism destinations such as Goa, Jaipur, Kochi, and Srinagar, thereby stimulating the travel and tourism economy.

The airline is also diversifying its revenue streams through cargo operations and charter services, targeting both corporate and leisure segments. This approach seeks to balance the cyclical nature of passenger travel with steady freight demand. Furthermore, SpiceJet’s plans to restore its full operational fleet align with India’s growing demand for affordable air travel, particularly as tourism continues to rebound post-pandemic.

The Broader Tourism and Aviation Outlook in India

India’s aviation and tourism sectors remain closely linked, with airlines serving as a vital enabler of domestic and international travel. The setbacks faced by SpiceJet in Q2 FY26 underline the fragile balance between operational efficiency and external economic variables. However, as tourism continues to expand with the easing of visa regulations, infrastructure upgrades at key airports, and the rise in leisure travel, airlines are expected to play an instrumental role in supporting regional economies.

Industry analysts have suggested that a revival in travel demand during the festive and winter seasons could offer partial relief to airlines. Increased tourist movement across destinations such as Kerala, Rajasthan, and Uttarakhand is projected to enhance domestic passenger volumes. This rebound, coupled with fleet normalization, may help offset part of the financial strain experienced during the early quarters of the fiscal year.

Stock Performance and Market Reaction

As of November 12, 2025, SpiceJet’s stock closed at ₹35.48 on the Bombay Stock Exchange (BSE), marking a 4.17% increase for the day. Despite the recent loss announcement, investors responded positively to the airline’s fleet expansion plans and recovery projections. The stock traded between a day’s range of ₹33.94 to ₹35.98, while its 52-week range reflected significant volatility between ₹28.13 and ₹63.40. Market observers noted that investor confidence remains tied to the airline’s ability to execute its revival plan and navigate macroeconomic headwinds.

Future Prospects and Industry Implications

The upcoming quarters will be pivotal for SpiceJet as it seeks to transition from a phase of recovery to one of sustainable growth. With aircraft induction progressing and operational restrictions gradually easing, the airline is positioned to strengthen its domestic network and restore profitability. Management forecasts a positive financial turnaround in the second half of FY26, driven by increased flight frequencies, stable currency conditions, and rising travel demand.

For India’s aviation and tourism ecosystem, SpiceJet’s revival is essential not only from a business standpoint but also for maintaining competitive airfares and connectivity across underserved regions. The carrier’s efforts to enhance its operational reliability and expand its network could significantly contribute to India’s long-term goal of becoming one of the world’s largest aviation markets.

The widening of SpiceJet’s Q2 FY26 losses reflects the multifaceted challenges facing India’s aviation and tourism industries, from currency depreciation and maintenance delays to airspace limitations and volatile fuel costs. Yet, amid these headwinds, the airline’s forward-looking approach toward fleet restoration and strategic growth provides a foundation for optimism. As Ajay Singh emphasized, the short-term costs of restructuring and expansion are being viewed as investments in a stronger, more resilient future. With India’s air travel sector on a gradual upswing and tourism demand poised for further growth, SpiceJet stands at a critical juncture where efficient execution could transform current setbacks into a renewed phase of opportunity and expansion for both the airline and the nation’s travel landscape.