With an influx of more than Rs 900 crore in funding this month, SpiceJet is set to concentrate on upgrading its fleet and implementing cost-cutting measures as part of its strategy to navigate through challenging times. The no-frills airline, which has been encountering various challenges in recent months, communicated to its senior staff in an internal note on Monday, highlighting a robust bank balance of over Rs 900 crore. This includes Rs 160 crore received as an installment under the government's Emergency Credit Line Guarantee Scheme (ECLGS).
SpiceJet has faced headwinds, but it recently received an infusion of funds, bringing the total amount under the ECLGS to around Rs 1,000 crore. The latest installment followed Chairman and Managing Director Ajay Singh's personal funds injection into the airline, with Singh contributing Rs 200 crore out of the Rs 500 crore fund infusion announced last year. In the last three months, the airline has successfully raised more than Rs 1,100 crore in funds.
Last week, SpiceJet disclosed the receipt of the first tranche of Rs 744 crore as part of the total Rs 2,250 crore being raised through the issuance of securities on a preferential basis. During a recent meeting with senior officials, Singh underscored the importance of prudent spending and announced his personal oversight of major expenditures. The airline is poised to prioritize fleet upgrades, enhance on-time performance, and implement cost-cutting measures to streamline operations.
Currently operating with around 40 planes, SpiceJet has expressed interest in bidding for the bankrupt Go First and aims to secure additional funds to strengthen its financial position. In tandem with its revival efforts, the airline has issued a stringent 'perform or perish' directive to address underperformance issues. In 2023, SpiceJet carried 83.90 lakh passengers and held a domestic market share of 5.5 percent.
Despite its revival initiatives, the airline has faced legal challenges, and earlier this month, the Directorate General of Civil Aviation (DGCA) imposed a fine of Rs 30 lakh on SpiceJet for rostering lapses involving pilots in low visibility conditions. In the morning trade on the Bombay Stock Exchange (BSE), SpiceJet's shares experienced a marginal increase, reaching Rs 61.90 apiece.