Low-cost carrier SpiceJet is poised for a significant transformation, with plans to upgrade its fleet following a substantial funding injection of Rs 900 crore this month. The company’s shares witnessed a notable surge of over 5% on January 29, reaching an intraday high of Rs 65.40 on the Bombay Stock Exchange (BSE). The current market capitalization stands at Rs 4,465 crore, with a 52-week high of Rs 69.20 and a low of Rs 22.65.
The airline is strategically focusing on fleet enhancement and cost-cutting measures to navigate through challenging times. In a recent internal communication to senior staff, SpiceJet highlighted a robust bank balance exceeding Rs 900 crore, including Rs 160 crore received through the government’s Emergency Credit Line Guarantee Scheme (ECLGS).
Chairman and Managing Director Ajay Singh, a key figure in steering the carrier, has infused Rs 200 crore out of the promised Rs 500 crore fund infusion from last year. The total funds garnered in the last three months exceed Rs 1,100 crore, with the latest tranche of Rs 744 crore received last week through the issuance of securities.
During a meeting with senior officials, Singh emphasized prudent spending and personally overseeing major expenditures. The carrier is set to prioritize fleet upgrades, on-time performance enhancement, and rigorous cost-cutting measures to streamline operations. With an operational fleet of around 40 planes, SpiceJet is gearing up for a comprehensive revitalization.
Expressing interest in bidding for the bankrupt Go First, SpiceJet aims to raise additional funds to fortify its financial position. Alongside the financial rejuvenation, the airline has issued a stern directive of ‘perform or perish’ to address underperformance issues.
Despite legal woes and recent fines imposed by the Directorate General of Civil Aviation (DGCA), including a Rs 30 lakh penalty for lapses in pilot rostering during low visibility conditions, SpiceJet remains optimistic about its future. In 2023, the carrier flew 83.90 lakh passengers, holding a domestic market share of 5.5%.
As the company embarks on the path of revival, shares of SpiceJet marginally rose to Rs 61.90 apiece in morning trade on the BSE, signaling a positive market response to the strategic initiatives and financial reinforcements undertaken by the airline.