SpiceJet close to tapping funds from overseas investors

SpiceJet close to tapping funds from overseas investors

SpiceJet close to tapping funds from overseas investors

Low-cost carrier SpiceJet is in “very advanced stages of discussions” with overseas investors to raise capital for fund its expansion plans, the Kalanithi Maran-controlled airline said on Tuesday.

Without revealing details of the discussions or identities of prospective investors, an airline spokesperson said that once capital infusion is finalised, it would help it clean up its arrears and rebuild with confidence. 

“Our restructuring plan in terms of overall revenues and cost strategy is only just starting to take effect, and will intensify in the coming days; costs especially tend to be ‘stickier’ than revenues and in the short term tend to go up as there are restructuring costs that are incurred,” the spokesperson said, adding that the airline would be pursuing cost optimisation on a war footing.

It rubbished reports which had suggested a 30 per cent cost-cutting drive, saying that no such thing has been discussed. 

SpiceJet reported record net losses of Rs 1,003 crore in fiscal 2014. However, the airline said that its losses in the last quarter (January-March 2014), which was a lean season, were 40 per cent lower than during the previous lean season (July-Sept 2013). 

“Despite a further weakening demand environment and lower loads across all airlines, we are reducing losses and slowly turning the ship around, but it will take some more time and patience before the job is complete,” the airline said.

Noting that load factors across the aviation industry have been falling due to the combined effect of slowing demand growth and industry capacity addition, the spokesperson said that the airline’s network, product, pricing, on-time performance, service levels, and brand positioning have improved significantly in the past few months. 

As per data furnished by the Civil Aviation ministry for April, SpiceJet ranked fifth in overall occupancy at 73.3 per cent.

Data also showed that SpiceJet had the highest cancellation rate of one per cent followed by Air India's domestic operations at 0.8 per cent, Air Costa at 0.5 per cent, GoAir, Jet Airways and JetLite at 0.4 per cent and IndiGo at 0.1 per cent.