The aviation industry is like any others.... fluctuating and aligning to the market variables. Though the situation is definitely grim at the moment (and here i am not singling out spicejet, but indian aviation as a whole), it would definitely ease out in about a year's time.
It's high time the airlines stopped bleeding each other by selling tickets at low prices just to get higher load factors. At the end of the day, its like any other business. They need to make money.
Passengers will definitely travel, even if they need to shell out more moolah to get that seat. Don't we all still drive paying almost twice as much as we used to for fuel ??