SpiceJet secures Rs 900 cr funding to enhance fleet.

SpiceJet Secures Over Rs 900 Crore Funding for Fleet Upgradation and Cost-cutting Measures

SpiceJet, the no-frills airline, is set to focus on fleet upgradation and cost-cutting measures as it receives more than Rs 900 crore in funding this month. In an internal note to senior staff, the airline revealed a substantial bank balance of over Rs 900 crore, including Rs 160 crore obtained through the government’s Emergency Credit Line Guarantee Scheme (ECLGS).

Having faced numerous challenges in recent months, SpiceJet has already received around Rs 1,000 crore under the ECLGS. The latest tranche was injected into the airline by its Chairman and Managing Director, Ajay Singh. Singh has contributed Rs 200 crore so far out of the Rs 500 crore fund infusion announced last year.

In total, SpiceJet has successfully raised more than Rs 1,100 crore over the past three months. Last week, the airline confirmed receiving the first installment of Rs 744 crore as part of a total of Rs 2,250 crore raised through the issuance of securities on a preferential basis. The airline initially announced its plan to raise fresh capital in December last year.

During a meeting with senior officials, Singh stressed the importance of judicious spending and personally overseeing major expenditures. The airline will prioritize fleet upgrades, enhance on-time performance, and implement cost-cutting measures to streamline operations. Currently, SpiceJet operates a fleet of approximately 40 planes.

In addition to securing funding, SpiceJet has expressed interest in bidding for the bankrupt airline Go First and plans to raise additional funds to strengthen its financial position. As part of its revival strategy, the company has issued a directive of “perform or perish” to address underperformance.

In 2023, SpiceJet transported 83.90 lakh passengers and held a domestic market share of 5.5 percent. However, the airline has faced multiple challenges, including legal issues. Recently, the aviation regulator DGCA imposed a fine of Rs 30 lakh on SpiceJet for rostering lapses regarding pilots’ operations in low visibility conditions.

With this recent funding boost, SpiceJet aims to overcome its turbulent times and focus on fleet improvements and cost-saving initiatives. The airline’s shares marginally rose to Rs 61.90 apiece in morning trade on the BSE.

[Published: Jan 29, 2024, 12:31 PM IST]

SpiceJet, a leading Indian airline, has secured funding of over Rs 900 crore. The funds will primarily be used for fleet upgradation, allowing the airline to enhance its services and improve customer experience. With this investment, SpiceJet aims to modernize its existing fleet and incorporate newer, more fuel-efficient aircraft. The move is expected to result in reduced operational costs and increased efficiency, further strengthening the airline’s position in the competitive aviation industry.

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