Gulf airlines eyeing stake, says SpiceJet

SpiceJet to order 150 planes in FY16

Budget carrier SpiceJet, which has surged 280 per cent this year, has said Gulf airlines have shown interest in buying a stake in the airline.

"Some of the Gulf airlines have expressed an interest in SpiceJet as we have come back into the market, but this is not the right time to be diluting the equity," Chairman Ajay Singh said in Dubai on Sunday, without naming the companies. "There is some dialogue which is ongoing and we continue to explore other types of relationships we could have," he said, adding now isn't the right time to sell a stake as the shares remain undervalued.

Gulf carriers including Abu Dhabi-based Etihad Airways PJSC and Qatar Airways have acquired stakes in airlines to quickly expand their networks. Etihad has stakes in eight companies, while Qatar Airways. said earlier this month that it was interested in boosting its 10 per cent holding in British Airways parent International Consolidated Airlines Group SA and taking up to 49 per cent of Indian budget carrier IndiGo.

SpiceJet is also planning to order new planes after co-founder Singh rescued the company from the verge of shutdown last year. After reporting a profit for the past three quarters, the airline is planning to finalise an order for 150 single-aisle jets from either Boeing or Airbus Group during 2015-16, Singh said. The company is also planning an additional order of up to 50 regional jets and is in talks with suppliers including Bombardier, he said.

"SpiceJet is generating enough cash internally to sustain those orders," said Singh. "If we need to raise any money to fund those orders, which looks unlikely at this time, there are enough unutilised credit lines available to us."

Singh now wants to more than quadruple the carrier's fleet from 41 aircraft at present.

"We're looking at both Airbus and Boeing; the Boeing 737 Max aircraft as well as the Airbus A320 Neo. We have received offers from both of them," Singh said.

SpiceJet has reported profits in the past three quarters, having made losses in the five preceding quarters. Earlier this month, SpiceJet reported a small net profit for the September quarter, helped by sliding fuel costs. "If oil prices remain moderate, (there is) no reason why this profitability shouldn't continue," Singh said.

New aircraft would be used to open new routes and increase the frequency of flights to existing destinations, he said. SpiceJet has 25 Boeing 737 jets, two Airbus planes, and 14 Bombardier aircraft and flies to 40 destinations, including the Maldives, Dubai and Sri Lanka and 34 domestic locations.

More flights from Dubai

SpiceJet also said it would operate more flights from Dubai to India. It also announced special one-way offers for its flights from Dubai, starting from a base fare of Rs 4,400.

ROAD AHEAD

• SpiceJet to decide on Boeing 737 Max aircraft and Airbus A320 Neo by March
  

 

Aims to more than quadruple carrier's fleet from 41 aircraft at present