Two years on, SpiceJet flies into zero-debt status

A day after US President Donald Trump thanked SpiceJet for its large Boeing order, Ajay Singh, chairman and managing director of the airline which was on the verge of closing down two years back, said the carrier had practically no debt or government dues left to pay.

"We have paid back most of the liabilities. Today, there are no government dues, there is zero bank debt. We have cleaned the slate as far as the past is concerned," Singh, who had co-founded SpiceJet in 2005, before selling his majority stake in the airline to Kalanithi Maran of Sun TV for Rs 750 crore in 2010. But when the airline was in trouble, Singh again came on board by acquiring 58% equity stake from Marans in January 2015.

Talking about the turnaround after the 'near-death' experience in 2014, Singh said for the last 25 months in a row the airline has had a load factor in excess of 92%, helping it report nine profitable quarters.

Singh said deliveries of 205 Boeing Max 737 ordered from the US-based manufacturer will start from the middle of 2018.

"Funding arrangements for those (aircraft) are coming very quickly in place. We have already funded a significant number of those aircraft through a sale-and-leaseback mechanism. And we have several offers. We really see no great challenge to funding these planes. Going further we will take a call, depending on what is cheaper for us at that point in time," Singh said.

"Our objective is that whatever we go in for should reduce the cost of financing. Fortunately, we are in a pretty conducive financial environment where interest rates are low across the world, and this is an immediately 'finance-able' aircraft. So it will help us reduce financing costs too," he said.

US President Donald Trump had on Monday thanked the airline for its large 205 aeroplane order worth $22 billion with the aircraft manufacturer which will help in creating 132,000 high skilled jobs in the country.

Asked about excess capacity in the Indian aviation sector due to large plane orders which most of the airlines have placed, Singh said, "There is enough for more; even if the market grows around 12-15%, there is a requirement of 60 aircraft every year. There is space for all."

On Tuesday, SpiceJet stock went down 3.59% to close at Rs 123.45, IndiGo fell 1.89% to Rs 1217.85, while Jet Airways dropped 1.19% to Rs 551.55 as oil prices inched up.

...& ANALYSIS

• For the last 25 months the airline has had a load factor of over 92%, helping it report nine profitable quarters
   
• Deliveries of 205 Boeing Max 737 ordered from the US-based firm will start from the middle of 2018