Said a top executive who did not want to be identified: “Earlier, achieving consensus at the board level was very difficult, as the stakeholders had varied interests. This has changed.”
As an example, he said the plan to expand its fleet was on for a long while but the decision could only be taken after Maran took charge.
SpiceJet operates a fleet of 21 aircraft and will induct seven more in the current calendar year. The airline had, before Maran, planned to add only four aircraft.
It now plans to operate 50 aircraft by 2014, having recently ordered for 30 new aircraft with Boeing, at a cost of $2.7 billion (Rs 12,660 crore). Delivery is to start from 2014.
Maran’s entry also saw around half the 20 key managers leaving, starting with Chief Executive Officer Sanjay Agarwal. “All the key top guys he hired left after his exit,” said another executive.
Founding Director Ajay Singh also left the board, though his family and he continue to hold 10 per cent in the airline.
Analysts also believe a strong promoter will give direction to the airline. “SpiceJet does not have a Unique Selling Proposition (USP) to peg their marketing on. After a promoter like Maran, they will get one,” said Rajeev Batra, executive director, KPMG. He was also hopeful, given Maran’s earlier record in building Sun.
Not all believe so.“Running a media business and an airline are two different things. Maran’s entry has provided enough cash to the airline but any further growth will depend on the skills of the new management under the new CEO,” said Mahantesh Sabard, a senior aviation analyst at Fortune Brokerage.
KAL Airways, a firm owned by the Sun TV Chief, had bought a total stake of 37.7 per cent in the airline in June at a cost of Rs 746 crore, with the option of acquiring another 20 per cent stake through an open offer. The open offer would involve an outgo of around Rs 480 crore, taking the overall deal size to Rs 1,220 crore.
SpiceJet, for the first time since inception, made a profit of over Rs 61.40 crore in the last financial year.
The market has also given a thumbs-up to Maran’s entry and the airline stock price rose by over 30 per cent from Rs 56 in June when the deal was done to Rs 74 now.