SpiceJet gets over Rs 900 cr funding; to focus on fleet upgradation, cost cutting measures

PTI, Jan 29, 2024, 12:48 PM IST

Representative image (Source: Twitter)

With more than Rs 900 crore funding coming in this month, SpiceJet will focus on upgradation of its fleet and cost-cutting measures, as the no-frills airline works on ways to come out of turbulent times.

In an internal note to the senior staff on Monday, the airline said it now has a substantial bank balance of more than Rs 900 crore, including Rs 160 crore received as an installment under the government’s Emergency Credit Line Guarantee Scheme (ECLGS).

The carrier, which had been facing multiple headwinds in recent months, has so far received around Rs 1,000 crore under the ECLGS.

The latest installment came recently after its Chairman and Managing Director Ajay Singh infused funds into the airline, according to an official in the know.

Singh, who has been helming the no-frills carrier, has so far put in Rs 200 crore out of the Rs 500 crore fund infusion that he had announced last year.

The official said the airline has garnered a total of more than Rs 1,100 crore funds in three months.

Last week, the airline announced it has received the first tranche of Rs 744 crore as part of the total Rs 2,250 crore being mopped up through issuance of securities on a preferential basis.

On December 12, the airline said it would raise fresh capital of Rs 2,250 crore through issuance of securities.

During a meeting with the airline’s senior officials, Singh emphasised the importance of judicious spending and that he will personally oversee all major expenditures.

According to the note, the carrier will prioritise fleet upgrades, enhance on-time performance and cost-cutting measures will be implemented to streamline operations.

Currently, the airline has an operational fleet of around 40 planes.

SpiceJet, which has also expressed an interest to bid for bankrupt Go First, will be looking to raise more funds to shore up its financial position.

As it embarks on the revival path, the airline has also issued a stern directive of ‘perform or perish’ to tackle under performance.

In 2023, the carrier flew 83.90 lakh passengers and had a domestic market share of 5.5 percent.

The airline has been facing multiple headwinds, including legal woes. Earlier this month, aviation regulator DGCA imposed a fine of Rs 30 lakh on the carrier for lapses in rostering of pilots for operations in low visibility conditions.

Shares of SpiceJet marginally rose to Rs 61.90 apiece in the morning trade on the BSE.