SpiceJet expecting restructuring benefits to improve in Dec quarter: Ajay Singh

The budget carrier – looking to raise $200 million – witnessed its net loss widen to ₹789 crore in the June quarter. The firm cited high fuel prices and rupee depreciation as reason for the loss.

Apart from this, some of its aircraft having technical snags in recent times, and quite a few of its Boeing 737 planes were deregistered due to non-payment of dues to lessors.

Spicejet’s chief Ajay Singh, in his message in the airline’s annual report for 2021-22 fiscal, said the firm has completed a series of settlements with most of the major partners, including manufacturers and lessors. 

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Also, he said, the airline industry worldwide continues to undergo a transformation.

“The sky-high fuel prices, depreciating rupee, erratic passenger demand and disrupted supply chains have deferred growth plans and expanded losses,” he noted.

As per details, the airline has received shareholders’ nod for transfer of its logistics business to SpiceXpress and the process of hiving off the cargo and logistics platform is expected to be completed soon.

“Our logistics business has been valued at ₹25,557.7 million and the transfer of business under this process will help us significantly strengthen our balance sheet and wipe out the negative net worth of our business,” Singh said.

“We expect to see improvement in operations and restructuring benefits will be visible starting Q3 FY2023,” Singh added. The airline is scheduled to hold its annual general meeting on December 26.

Among other things, Spicejet MD and CEO said the airline is engaged with investment bankers to raise up to USD 200 million in order to achieve its future plans and that the increase in the Emergency Credit Line Guarantee Scheme (ECLGS) to ₹1,500 crore will go a long way in providing the much-needed stability to the sector.

“The infusion of additional funds will help SpiceJet normalise its obligations, unground its fleet and induct new planes into our fleet… we have also completed a series of settlements with most of our major partners including manufacturers and lessors setting the stage for our seamless growth and expansion,” he said.

In October, SpiceJet carried 8.29 lakh passengers on local routes and its domestic share stood at 7.3 per cent.

With PTI inputs.