SpiceJet Progress Towards Financial Stability
Cash-strapped budget airline SpiceJet recently raised Rs 3,000 crore through a qualified institutional placement (QIP) of shares. The Chairman and Managing Director, Ajay Singh, shared that the airline aims to become cash-flow positive in the next two years. Despite facing challenges, Spice Jet has been making steady progress with the support of stakeholders and customers.
Investor Confidence in SpiceJet’s
Initially, there were concerns from investors, but they believed in SpiceJet’s revival and growth story. With exclusive slots, traffic rights to popular destinations, and a fleet of planes ready to fly, SpiceJet attracted funding from major investors. This reflects confidence in the Indian aviation industry and SpiceJet’s management.
Milestones for Turnaround
The recent capital infusion helped resolve 70% of claims with lessors and vendors. By the end of the financial year, SpiceJet’s aims to have 35 operational aircraft. The goal is to have 70 aircraft by FY26 and 100 by FY27, becoming cash-flow positive. The airline is working towards resolving remaining claims and ensuring smooth operations.
Government Support and Industry Reforms
The government has been supportive of the aviation industry, introducing policies to enhance connectivity and competition. Spice Jet believes that bringing aviation turbine fuel (ATF) under the GST framework and expanding the UDAN scheme are critical reforms needed. The airline also emphasizes the importance of infrastructure upgrades at major airports to boost India’s aviation sector.
UDAN Scheme Expansion
The UDAN scheme has been instrumental in connecting underserved regions and driving regional development. Spice Jet sees potential in expanding the scheme to include seaplanes, which could revolutionize connectivity in areas like the Andaman Islands. Enhancing connectivity to remote locations is crucial for economic development and tourism. In conclusion, SpiceJet is optimistic about its turnaround plan and is confident in its ability to thrive in the future with continued support from stakeholders and customers.
These detail is taken from the interview published by MoneyControl.