NEW DELHI: “We refuse to die,” Ajay Singh, the promoter of SpiceJet, had said at an industry event earlier this summer when the low-cost carrier had almost run out of money. His words may have come true as sources say SpiceJet – the quintessential cat with nine lives – is learned to have once again got another lifeline in the form of Rs 3,000 crore funding via an oversubscribed QIP.
Just under a decade ago, Singh had taken back the airline from Kalanithi Maran when it was on the brink of collapse. Now when the airline was in the same – if not worse – financial condition and its obits were being prepared, the Rs 3,000-crore funding may have given it yet another life.
When asked about SpiceJet woes recently, Union aviation minister Rammohan Naidu had said, “India needs more airlines, not less.” Over 90% of domestic air travel happens on IndiGo and Tata Group airlines led by Air India. India’s youngest airline, Akasa, has a fleet of 25 and is facing delivery woes from Boeing for its ordered planes. If SpiceJet is able to unground its fleet quickly & clear employees’ salary, PF & TDS dues apart from other payables after this cash infusion and operate more flights – with better on time performance – that will be good news for passengers.
Covid had seriously impacted airlines globally. India saw GoAir collapse post the pandemic. SpiceJet issues started a little before the pandemic when Boeing 737 MAX planes were grounded across the world. It had to then use the old gen fuel guzzler planes. Even after MAX started flying again, Boeing did not deliver any of this plane to SpiceJet due to its financial condition.
“SpiceJet will need to regain the trust of its employees, plane & engine lessors, supply chain partners, all other stakeholders and most importantly the flyers. This money must be spent very carefully for rebuilding the airline,” say industry insiders.
Nine lives of SpiceJet:
Just under a decade ago, Singh had taken back the airline from Kalanithi Maran when it was on the brink of collapse. Now when the airline was in the same – if not worse – financial condition and its obits were being prepared, the Rs 3,000-crore funding may have given it yet another life.
When asked about SpiceJet woes recently, Union aviation minister Rammohan Naidu had said, “India needs more airlines, not less.” Over 90% of domestic air travel happens on IndiGo and Tata Group airlines led by Air India. India’s youngest airline, Akasa, has a fleet of 25 and is facing delivery woes from Boeing for its ordered planes. If SpiceJet is able to unground its fleet quickly & clear employees’ salary, PF & TDS dues apart from other payables after this cash infusion and operate more flights – with better on time performance – that will be good news for passengers.
Covid had seriously impacted airlines globally. India saw GoAir collapse post the pandemic. SpiceJet issues started a little before the pandemic when Boeing 737 MAX planes were grounded across the world. It had to then use the old gen fuel guzzler planes. Even after MAX started flying again, Boeing did not deliver any of this plane to SpiceJet due to its financial condition.
“SpiceJet will need to regain the trust of its employees, plane & engine lessors, supply chain partners, all other stakeholders and most importantly the flyers. This money must be spent very carefully for rebuilding the airline,” say industry insiders.
Nine lives of SpiceJet:
- 1993: S K Modi starts Modiluft with Lufthansa. Airline stops flying in 1996.
- Modis sell airline to UK-based Bhulo Kansagra
- 2004: Ajay Singh invests into airline
- 2005: Kansagra & Singh launch SpiceJet
- 2008: Kansagra sells stake to US distress investor Wilbur Ross who gets controlling hold in airline
- 2010: Ross and Ajay Singh sell stake to Kalanithi Maran
- 2015: Maran to sell stake back to Ajay Singh-led consortium
- 2024: Airline learnt to have secured Rs 3,000 crore funding after virtually running out of money
#brink #SpiceJet #lifeline #Times #India
