Funding in; SpiceJet to clear employee dues & grow to fleet of 100 in 2 years: Ajay Singh

NEW DELHI: SpiceJet is back from the brink once again after yet another near collapse by getting Rs 3,000-crore funding from investors including mutual funds and is now aiming to have a fleet of 100 aircraft before the end of 2026. The latest crisis, brewing for the last 5-6 years, had peaked in recent months and proved to be a bigger existential threat than anything this proverbial cat with nine lives had seen in its rollercoaster life.

But like 2015, when he had acquired SpiceJet from the then owner Kalanithi Maran, airline CMD Ajay Singh has managed to prevent the airline from going the Kingfisher, Jet or GoAir way. His stake now diluted to 35% from earlier 48% after this QIP, Singh told TOI Sunday two valuable lessons have been learnt to be resilient going ahead: “Keep cash for the next black swan event. And never assume black swan event/s won’t recur.”

“After acquiring SpiceJet in 2015, we had improved its operational and financial metrics in a very short time. With highest aircraft occupancy, there were profitable quarters on the trot. We ordered 200 Boeing 737 MAX aircraft. Everything was going just fine when two black swan events happened in quick succession: global grounding of the 737 MAX in March 2019 and then Covid in 2020,” he said.

While the airline ventured into cargo in a big way during Covid, its payables to all stakeholders and liabilities kept mounting. PF and TDS of employees could not be paid for over two years. Engine & aircraft lessors dragged it to court for repossessing their assets. Things came to a head this summer when it nearly completely ran out of cash and SpiceJet obits were being written.

So in this situation how did he convince investors to put money? “We just told them the truth about our airline. They saw what we had done after 2015. Investors were convinced of India’s aviation growth story and the fact that a duopoly in the skies (referring to IndiGo and Tata Group AI-led carriers) is not in consumer interest. They saw potential in us to grow. At no time did I feel that it is curtains for the airline. Eventually when most had written us off, the demand for our QIP was way more than the Rs 3,000 crore approved of by shareholders,” Singh said.

The airline, which “refuses to die”, has its task cut out with these funds over for the next few weeks: clear all employee dues, including salaries & PF, latest by early next month; improve on time performance; get the 30-odd grounded planes back in the air & increase flights; clear all statutory dues. And most importantly keep some funds in reserve for the next black swan event/s.

We have resumed dialogue with Boeing for getting delivery of MAX ordered by us. Since the last two we have been flooded with job applications. We will rededicate all efforts to be an efficient and on time airline,” he said.