Resurrecting SpiceJet

The strategy to launch the cargo business has paid off, but Ajay Singh has to ensure adequate capital for the airline, while battling rising costs and stiffcompetition.

- ANJULI BHARGAVA

As Ajay Singh, 56, chairman and managing director (CMD) of low-cost carrier SpiceJet headed for the Dubai Airshow on Sunday November 14, his troubles over the last two years seemed behind him. Somewhat deceptively though. Just two days earlier, SpiceJet announced Q2 FY22 results, reporting 149% growth over the previous quarter; losses were down and passenger loads, revenues, yields and departures were higher.

A month before, in October, on the sidelines of an IATA meeting in Seattle, Singh managed to settle the long-pending issue with Boeing over the grounded B737 MAX aircraft. Boeing agreed to offer cash and kind amounting to $200 million as part of the compensation for grounding of the planes in SpiceJet’s fleet and delay in supply of the remaining 142 aircraft,. “We made excellent progress in our recovery and I expect this trend to continue. The settlements with key lessors, return of the 737 MAX in the current quarter, transfer of logistics business are positive tailwinds that should have a significant impact on our long-term plans,” says Singh.

The pandemic forced airlines to find new ways to stay relevant. At a time when aircraft were parked in airports, Singh decided to enter the cargo business — it worked. He is all set to hive off the logistics business into a new firm under ‘SpiceXpress’ brand and deliver value to SpiceJet. The funds will be deployed to help SpiceJet settle outstanding dues.