In a major development for the Indian aviation sector, SpiceJet has announced that it has more than Rs 900 crore in funding coming in this month. The low-cost airline plans to utilise this funding for the upgradation of its fleet and cost-cutting measures.
In an internal note to the senior staff, the airline said it now has a substantial bank balance of more than Rs 900 crore, including Rs 160 crore received as an installment under the government’s Emergency Credit Line Guarantee Scheme (ECLGS).
The Gurugram-based carrier, which had been facing multiple headwinds in recent months, has so far received around Rs 1,000 crore under the ECLGS.
The latest installment came recently after its Chairman and Managing Director Ajay Singh infused funds into the airline, according to an official in the know.
Notably, Singh has been helming the no-frills carrier and has so far put in Rs 200 crore out of the Rs 500 crore fund he had announced last year. The official said the airline has garnered a total of more than Rs 1,100 crore funds in three months.
SpiceJet to raise Rs 2,250 crore through issuance of securities
In December last year, the crisis-hit airline announced it would raise more than Rs 2,250 crore through the issuance of equity shares to a raft of investors, including financial institutions and FIIs. The move is aimed at helping the carrier to navigate the financial turbulence.
Last week, the carrier announced it has received the first tranche of Rs 744 crore as part of the total Rs 2,250 crore being mopped up through the issuance of securities on a preferential basis.
During a meeting with the airline’s senior officials, Singh emphasised the importance of judicious spending and that he will personally oversee all major expenditures.
Spicejet’s expansion plan
At present, the airline has an operational fleet of around 40 planes. SpiceJet, which has also expressed an interest to bid for bankrupt Go First, will be looking to raise more funds to shore up its financial position.
As it embarks on the revival path, the airline has also issued a stern directive of ‘perform or perish’ to tackle underperformance.
In 2023, the carrier served 83.90 lakh passengers and had a domestic market share of 5.5 percent.
