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New Owner Injects Rs 500 Cr Into SpiceJet

New Delhi
New Owner Injects Rs 500 Cr Into SpiceJet
outlookindia.com
-0001-11-30T00:00:00+0553

Budget carrier SpiceJet has received Rs 500 crore from its new owner Ajay Singh in a much- needed shot of funding even as he today hinted at bringing in new people into the airline's management, but ruled out any immediate changes.

Singh, whose injection of the funds yesterday is part of a Rs 1,500 crore investment plan to revive the airline, also said that he was open to reviewing SpiceJet's discount fare sales strategy for stimulating demand to decide whether to go on with it or not.

"We are looking around for some senior management. But we are not making massive changes in the airline at the moment," Singh told PTI today.

He said that the workforce in the airline seemed to be "adequate" for the summer schedule -- which will see more number of flights compared to winters -- but noted that "if we identify some great talent, we will consider that too".

SpiceJet does not have a chief executive officer ever since July, 2013, when the then CEO, Neil Mills, quit the airline. Besides, it also has not had a full chief financial officer for quite some time now.

Singh also said that some of the people who had left the carrier desired to come back and their wishes would be "considered".

The original promoter of SpiceJet, Singh is now back as the owner with 60.31 per cent stake following the exit of the Maran family. He has lined up two more instalments by April of funds for the airline.

Singh, meanwhile, said that SpiceJet's discount fare sale offer was good as long as it "stimulate" the market and was not dilutive of revenue.

"While stimulating demand, these offers cannot become dilutive of the revenue. They are for seats booked well in advance which, in our judgement, would otherwise have remained unsold. You should not be doing it (discount sales) if they are dilutive. So, we will take a relook at the whole strategy," he said.

SpiceJet would utilise the Rs 500 crore to settle dues with creditors, Singh said, adding that "a part of it will also go towards expansion".

"We want to use the money for settlement with creditors and the rest of it will be used for expansion. The thought was that we should first clear all the statutory liabilities," he said.

The airline has already cleared all outstanding payments towards oil companies, service tax, income tax (TDS) and employees' salaries and the dues of the Airports Authority of India are also being cleared through a daily instalment, he said.

"With two more tranches to be paid next month and in April, we will clear all outstanding payments gradually," Singh said.

Stating that the airline has proposed to operate 280 flights during the summers, Singh opined that, "for the summer schedule, the manpower seems to be fine across the spectrum".

In late January, the SpiceJet board had approved transfer of the entire 58.46 per cent stake held by Marans to Singh, while the company was to raise Rs 1,500 crore through issuance of fresh securities under a revival plan.

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