SpiceJet, which is looking to raise USD 200 million, expects to see improvement in operations and restructuring benefits in the current quarter of this financial year. The budget carrier's chief Ajay Singh has told shareholders that it has also completed a series of settlements with most of the major partners, including manufacturers and lessors.
Hit by high fuel prices and rupee depreciation, SpiceJet saw its net loss widen to Rs 789 crore in the June quarter. The airline is also facing other headwinds, including some of its aircraft having technical snags in recent times, and quite a few of its Boeing 737 planes were deregistered due to non-payment of dues to lessors.
In his message in the airline's annual report for 2021-22 fiscal, Singh, who is the Chairman and Managing Director, said the airline industry worldwide continues to undergo a transformation. "The sky-high fuel prices, depreciating rupee, erratic passenger demand and disrupted supply chains have deferred growth plans and expanded losses," he noted.
The airline has received shareholders' nod for transfer of its logistics business to SpiceXpress and the process of hiving off the cargo and logistics platform is expected to be completed soon. "Our logistics business has been valued at Rs 25,557.7 million and the transfer of business under this process will help us significantly strengthen our balance sheet and wipe out the negative net worth of our business.
"We expect to see improvement in operations and restructuring benefits will be visible starting Q3 FY2023," Singh said. The airline is scheduled to hold its annual general meeting on December 26.
Singh also said the airline is engaged with investment bankers to raise up to USD 200 million in order to achieve its future plans and that the increase in the Emergency Credit Line Guarantee Scheme (ECLGS) to Rs 1,500 crore will go a long way in providing the much-needed stability to the sector.
"The infusion of additional funds will help SpiceJet normalise its obligations, unground its fleet and induct new planes into our fleet... we have also completed a series of settlements with most of our major partners including manufacturers and lessors setting the stage for our seamless growth and expansion," he said. In October, SpiceJet carried 8.29 lakh passengers on local routes and its domestic share stood at 7.3 per cent.
(With PTI inputs)