After reading Capt Gopinath's comments in dna, civil aviation minister asks the low-fare airline pioneer in India to write a detailed note how the troubled airline could possibly be revived
It may still not be the end of the flight for the beleaguered budget airline SpiceJet. The government seems to be making a last bid effort to save the floundering airline.
Apparently, inspired by Capt G R Gopinath's, pioneer of low-fare aviation in India, comments in dna about government's role in saving the airline in the absence of a "bankruptcy protection law" in the country, civil aviation minister Ashok Gajapati Raju has asked him to prepare a detailed note on how to save SpiceJet. The airline veteran has already written something on those lines and would soon be submitting the same to the minister. Meanwhile, Capt Gopinath is fiercely advocating against letting SpiceJet crash without any attempts to resuscitate it. "Government must do everything to keep SpiceJet flying. Some of the actions of the regulator (directorate general of civil aviation) and (Airports Authority of India) AAI or oil companies may have, on the other hand, actually hastened its disintegration. I think the ministry has realised that (Kalanithi) Maran (current promoter of the airline) issue shouldn't come in the way of saving SpiceJet. They should separate them (saving the airline and Maran issue)," he said.
Capt Gopinath's stance, notwithstanding, there aren't many ways in which the troubled airline can be saved. Most options have been taken off the table. The only one that remains, say most experts, is of a white knight with deep pocket – in the shape of an investor/buyer or Maran – coming to its rescue. A dna query to Sanjiv Kapoor, COO of SpiceJet, on whether Maran will infuse more capital into the troubled airline elicited no response
Pankaj Pandit, Bangalore-based aviation consultant, believes, if at all an angel investor decides to bail out the airline, it would be because there is immense growth potential in the domestic sector. "The average growth rate in the domestic sector over the last 10 years has been a healthy 16% compared to 11% in the international sector. There is immense potential in the domestic sector of the Indian airline market and this could prompt a foreign investor or airline to buy SpiceJet," he said. However, Pandit emphasised that any deal by investors would be done at the "right price".
"Maran's bought the airline at an average price of around Rs 57 per share. Today, it is down to Rs 15 per share. Somebody will buy when the valuation is low. Any investor will come only at the right price," he said.
Citing overseas examples of Air Berlin, which was bought over by Gulf carrier Etihad, and US's legacy airline American Airlines (AA) that was snapped by a much smaller player American West, Pandit said there could still be a slim chance of getting it airborne. In the case of AA, its smaller acquirer rebranded itself as American Airlines as the later was much bigger brand.
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