With more than Rs 900 crore in money arriving this month, SpiceJet will concentrate on fleet upgrades and cost-cutting initiatives as the low-cost carrier looks for ways to weather the current storm. The airline stated that it currently has a sizable bank balance of more than Rs 900 crore in an internal memo to top workers on Monday. This amount includes Rs 160 crore that the airline got as an installment under the government's Emergency Credit Line Guarantee Scheme (ECLGS). Under the ECLGS, the carrier, which has been dealing with a lot of challenges lately, has received about Rs 1,000 crore so far.
According to a source with knowledge of the matter, the most recent installment was made soon after Ajay Singh, the airline's chairman and managing director, contributed capital. Of the Rs 500 crore in funding that he had disclosed last year, Singh, who has been leading the low-frills carrier, has invested just Rs 200 crore thus far. According to the person, the airline has raised over Rs 1,100 crore in funding in just three months.
The airline declared last week that it has received the first tranche of Rs 744 crore, which is a portion of the Rs 2,250 crore that will be raised through the preferential issuing of stocks. The airline announced on December 12 that it would issue securities to obtain an additional Rs 2,250 crore in capital. Singh stressed the value of prudent spending during a meeting with senior airline personnel, adding that he will personally supervise all significant expenses. The statement states that the carrier will prioritize fleet upgrades, improve on-time performance, and streamline operations by implementing cost-cutting measures.
The Airline Now Operates about 40 Aircraft in its Fleet
In an attempt to strengthen its financial situation, SpiceJet—which has also indicated interest in making a bid for the bankrupt Go First - will seek to raise additional money. The airline has also given underperformance a harsh order to "perform or perish" as it sets off on its recovery route. The airline carried 83.90 lakh passengers in 2023 and held a 5.5% share of the domestic market.
The airline has been dealing with a number of challenges, including legal issues. The airline was fined Rs 30 lakh earlier this month by the aviation regulator DGCA for failing to roster pilots for operations in limited visibility. SpiceJet's stock increased slightly to Rs 61.90 per share in the early BSE trade.
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