SpiceJet Submits Revival Scheme
SpiceJet Submits Revival Scheme: Troubled Aviation Company In Need of Rescue
The aviation sector is fraught with its own risks and challenges. SpiceJet is one of the many carriers which is in need of rescue and the founding promoter Ajay Singh could well be the knight in shining armour this airline company needs. The airline carrier has submitted a revival plan to the government and has received USD 200 million from founding promoter Ajay Singh plus the US based financial services company JPMorgan Chase, as per media reports.
SpiceJet On Route With Revival Plan
Following the submission of the revival plan, the Chief Operating Officer of SpiceJet Sanjiv Kapoor has informed reporters that it was a “constructive meeting.” The CEO was accompanied by Singh, the original promoter who has reinvested in the carrier. There are no outstanding debts of the airline with any oil marketing company and 18 operational Boeing aircraft, the airlines is currently laying 230 flights per day. The airline has also paid its dues and ensured that the operability is at its best right now.
“SpiceJet has many well-wishers including Ajay Singh,” the COO has also remarked. Apart from Singh, the fund managed by JPMorgan Chase will also involve investors. The Marans are planning to exit SpiceJet according to media reports. Potential investors are likely to purchase the stake from the current promoter Kalanithi Maran through an infusion of INR 200 million within one month for enabling SpiceJet to stay afloat.
All Dues Wiped Off
The airline has received INR 17 crore from investors, as per official sources. SpiceJet has also wiped off its dues to oil companies. Earlier, the budget carrier’s dues to foreign and domestic vendors as well as airport operators and oil companies had gone up from Rs. 990 crore to Rs. 1,230 crore between the months of November and December in 2014, as per the data provided by the Indian airline company to the Ministry of Civil Aviation.
The airline has also resolved dues from foreign vendors including lessors of aircraft and maintenance repairs as well as overhaul. Currently, Kalanithi Maran owns 53.48% in the low-cost carrier.
From ModiLuft to SpiceJet
Ajay Singh had carved SpiceJet out of ModiLuft in 2004. When the company’s majority stake was picked up from Bhupendra Kansagra and Wilbur L. Ross in 2010 by Kalanithi Maran, SpiceJet’s Singh exited the company.
The airline is currently operating on cash and carry basis with oil marketing companies. It has received a breather from airports as well. According to reports, Singh aims to rationalise the company, change the management and eliminate Bombardier fleet.
Dark Days Behind The Airline
SpiceJet had grounded its fleet for more than 10 hours following closure of operations due to lack of approval from oil companies. The airline was shutting down according to rumours. The Civil Aviation ministry permitted bookings till the end of March and banking loans were extended to the aviation company while state controlled oil companies extended credit line for two more weeks.
SpiceJet Up for Revival
SpiceJet’s turn to shine may come soon with Singh’s intervention. Its back to the drawing board for this aviation company. Hopefully, winning moves will guide the company back to brighter days ahead.
