New SpiceJet owner plans to cut fleet, shrink network
New Delhi, January 16
Ready with a five-year plan to revive the fortune of SpiceJet, its original founder and new owner Ajay Singh is talking to multiple foreign investors for fund infusion into the budget carrier.
Singh, to whom current promoters Maran family has agreed to transfer ‘ownership, management and control’ in the airline, said necessary downsizing will also be undertaken as part of the restructuring plan, but it would be kept at minimum.
At the end of July-September quarter of 2014, for which the latest shareholding pattern is available, Marans held 53.48% stake in Spicejet. Thereafter, their stake rose further to 58.46% pursuant to conversion of warrants.
While Singh did not disclose the names of the foreign investors he was talking to, sources said that they could include US-based JPMorgan.
“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,” Singh said.
Yesterday, the SpiceJet board approved the ‘Scheme of Reconstruction and Revival’ that would see Kalanithi Maran and Kal Airways transferring ownership along with ceding management and control of the ailing airline to Singh. Singh said the revival plan would focus on strengthening finances and operational efficiency, among others.
He has also drawn up a five-year plan to rejuvenate the low-cost carrier, which may include phasing out of the Bombardier Q400 fleet.
The original founder has re-boarded SpiceJet amid the carrier facing financial crunch and even curtailing its operations significantly. — PTI
