Ajay Hanje, Pune
SpiceJet has announced the addition of 10 new aircraft to its fleet by the end of November. The news comes after the company recently raised an amount of Rs 3,000 crore. The announcement sent the airline’s share price up more than 9 percent on Tuesday. The stock touched Rs 63 per share and was trading at Rs 62.6 at 11:06 am. With the addition of three grounded aircraft and seven leased aircraft to the fleet, a milestone has been achieved in SpiceJet’s ongoing turnaround. According to the airline, two leased planes have arrived in India and will enter the market on October 10. The remaining flights will arrive in mid-November.
This growth comes after SpiceJet’s successful Qualified Institutional Placement (QIP), which enabled the airline to raise Rs 3,000 crore in September. The QIP was instrumental in the airline’s financial recovery, as it was able to pay off large debts and provide financing to extend operations. Top firms such as Tata Mutual Fund, Morgan Stanley Asia, Goldman Sachs (Singapore) and Discovery Global Opportunity Ltd. invested in SpiceJet through QIP. Apart from the funds raised from QIP, the airline is expected to get Rs 736 crore from the previous fundraising round.
SpiceJet needs this additional capital to pay Goods and Services Tax (GST) of Rs 71 crore and clear its duty free payments of Rs 80 crore from June to August 2024. In addition, the business is solving long-standing problems. On September 24, SpiceJet reached a favorable settlement for a small and undisclosed amount, settling a claim of $16.7 million from the Engine Lease Finance Corporation (ELFC). It has also entered into agreements with certain lessors that allow for the return of grounded aircraft. With more than 80% returns recorded in the last one year, the SpiceJet share price has seen a resurgence. This resulted in the company investing approximately NOK 8,000 million in the market.
The airline previously presented its expansion strategy to investors in September, outlining plans to unground 28 aircraft to quadruple its existing operating fleet of 28. As part of its larger expansion goals, the airline is also targeting exclusive regional and international routes to increase income. The airline previously presented its expansion strategy to investors in September, outlining plans to unground 28 aircraft to quadruple its existing operating fleet of 28. As part of its larger expansion goals, the airline is also targeting exclusive regional and international routes to increase income.