Kalanithi Maran-owned SpiceJet, India’s second-largest low-fare airline by market share, today said that it is not talking to any airline to divest as of now. However, it still maintained that it has both options including foreign investor and a private equity.
Speaking to reporters after the Airline’s Annual General Meeting today at Chennai SpiceJet Chief Executive Neil Mills said “we have not had formal talks with any airline and are not desperate to raise money as we don’t have any cash flow crisis”.
He added that the Airline will consider diluting stake to another airline if a good deal comes forward.
The government recently decided to allow international airlines to buy up to 49 per cent stake in Indian carriers and analysts said SpiceJet would be a major beneficiary of the move due to its market share, which is around 18 per cent, and relatively small balance sheet.
According to reports, the airline would require around $100 million to make a part payment for its $446 million order for 15 planes from Bombardier. Mills said three Bombardiers will be added to the Airline by December.
Asked whether the Airline is interested in PE fund, Mills said, “It is an option that we have and the fund raising, be it dilution to an airline or PE, will be done only if it makes economic sense to the shareholders and company."
The Wall Street Journal reported today that the airline was in advanced discussions with two private equity investors to raise at least $50 million.
On import of ATF, Mills said the airline will look at directly importing fuel in next few months and noted that at present, fuel prices are highest country has ever seen.
On discounts that airlines have given, he said it was upto 40% discount on base fared and have given an effective discount of 20 per cent, which will have an impact on gross revenue. Too much discounts will put us into problems we had last year,”, said Mills.
According to the airline, the narket has not grown in volume terms till now and still it live in a competitive world,” said Mills.
