"SpiceJet's Fleet Expansion Plans: A New Era of Growth for the Airline?"
SpiceJet's CEO Ajay Singh has announced the airline's plans to restructure its balance sheet, which will enable them to expand their fleet aggressively. They are also planning to introduce a significant number of dedicated cargo aircraft to their fleet, as the cargo business has helped them pay off their liabilities.
Carlyle Aviation Partners will acquire a 7.5% stake in the airline by converting outstanding dues, along with purchasing shareholding in the cargo business. Additionally, SpiceJet will raise up to INR 2,500 crore through the Qualified Institutional Buyer (QIB) route.
In the face of various challenges confronting the low-cost airline, the airline remarked that an element of urgency is beneficial for any organization, which will allow them to come out of the situation stronger.
During a session at the CAPA India aviation summit, Mr. Singh stated that despite the budget carrier facing multiple headwinds, "It is in our (SpiceJet's)DNA. We just refuse to die." He emphasized the airline's focus on reducing debt and restructuring its balance sheet, with plans for fleet expansion and raising fresh capital. Singh also noted the grounding of the Boeing 737 Max planes as a bigger disaster for the airline than Covid-19, despite their potential for more efficient operations. While SpiceJet reported a rise in net profit for Q3 of FY22, the airline incurred net losses in the preceding financial years. The grounding of the Max planes in India was lifted on August 26, 2021, after necessary rectifications were made by Boeing.
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