Low-cost Indian carrier SpiceJet continues to burn cash

Low-cost Indian carrier SpiceJet continues to burn cash
Edited by Travel Weekly


It’s not just low-cost Australian carriers that are facing hardship. SpiceJet, India’s version of Bonza, recently announced a 72 per cent reduction in its net loss versus last year. But, despite this improvement, the airline has posted losses for six straight years.

But it has secured board approval to raise up to INR 30 billion (AU$548 million) through institutional investors, which is disclosed in a filing to the Indian stock exchange this week.

The funds will help SpiceJet reduce its debt and bolster its balance sheet, as it continues with ongoing legal battles over unpaid aircraft lease fees, and debts to vendors and other suppliers.

The lessors  are also requesting the country’s aviation regulator de-register the airline’s planes.

In the June quarter this year, SpiceJet’s market share fell to 4.2 per cent, from 14.5 per cent in the same quarter in 2019.

The current fundraising bid follows SpiceJet’s board approving a proposal to raise  INR 22.5 billion from 64 entities, in January, but by February it had only raised about INR 10.6 billion.

It followed SpiceJet CEO, Ajay Singh, injecting INR 5 billion ($60 million) into the airline in August last year, to help put the airline’s grounded planes back in the air.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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