SpiceJet is all set to go back to its nofrills avatar-one that ran successfully till 2010.
Team Ajay Singh is hitting the ground running. Singh told MAIL TODAY, "There is no question of reducing the fleet; the game is to achieve criticality and scale up as quickly as possible. Effective April 1, we are expanding to 41 aircraft from the current 32-a combination of 26 narrow-body Boeing737s and 15 Bombardier Q400 regional aircraft. We have to be doing 400 flights a day. On the financial side, there are liabilities of close to Rs 2,000 crore, which we need to restructure and fix."
Singh is personally taking over Kalanithi Maran's 58.46 per cent equity and will subsequently bring in fresh equity subsequently in phase two.
Singh will have close to 63 per cent, of which through the issue of fresh equity, his shareholding will see a dilution to approximately 35 per cent. The balance will be taken by investors like JPMorgan Chase's unit along with other private equity players. At the core of the operation is to ramp up quickly so that the low-cost carrier can benefit from the benign crude prices.
At the same time, it appears that Singh will not have to make a mandatory open offer for the moment. Singh believes that he could break-even in the next financial year by keeping costs low and taking advantage of low oil prices.
"SpiceJet has excellent service standards and on-time performance, but it became too complex. The super-saver fares ran a riot of red across the books, which now need to be cleaned," said a source familiar with Singh's plans. Singh added, "The airline has given a revival and restructuring plan to the civil aviation ministry for change in control which has to be cleared by it. Once they (the ministry) do it, we will execute the revival plan."