SpiceJet still open for fresh “consolidation” moves
19 Jul 2008
New Delhi: Low-cost carrier, SpiceJet, is open to consolidation moves even after recent infusion of funds from American investor Wilbur Ross. According to a senior airline official, though funds from Ross do ensure working capital for the airline, they did not rule out further consolidation moves if it should bring value for shareholders.
Reports quote airline director, Ajai Singh, as saying he did not rule out further consolidation moves. Singh, who owns a 4.16% stake in the LCC, said that funding from Ross had indeed given the airline a breather in terms of working capital. Ross has indicated that he would not shy away from investing more funds if need be.
Singh also said that the domestic aviation industry was reducing capacity, on an average, by 20% and all airlines were reducing flights. SpiceJet always had the lowest operating costs, he said, and the airline would take further steps in this direction. As for the amount received from Ross, it remained to be seen how long it would continue to provide a cushion, as other factors, such as the price of oil, would determine operational variables.
The airline has shelved plans to expand its fleet of 19 aircraft. Of these, two have been leased out and another two are likely to follow suit.