SpiceJet (SG, Delhi International) is in advanced talks with undisclosed entities concerning a possible injection of much needed capital. The LCC's Chief Operating Officer, Sanjiv Kapoor, told Reuters in an interview earlier this week that his airline requires additional funding to ensure its restructuring programme is a success.
"Our challenge is our legacy losses and this cannot be solved by operational cash flows alone, but by funding or recapitalisation," he said adding that talks were currently underway with investors. "Hopefully in due course of time, we'll see some good news on that front."
Kapoor said the airline has seen significant improvement improvement in its operational and financial metrics with load factors on the rise.
"Load factors are going up, RASK (revenue per available seat kilometre) is going up, CASK (cost per available seat kilometre) is going down. Low-season losses are reducing and in high season we expect to be back in profits," he said.
Among the changes SpiceJet has seen are the overhaul of top-management, the termination of loss-making routes, all the while pursuing a strategy of heavily discounting advance sales in a bid to shore up occupancy. The struggling carrier has restructured outstanding aircraft orders while cutting capacity from 43 B737NextGens last year, to thirty-four currently. It is also considering removing older jets to improve overall fleet efficiency while cutting fuel costs. SpiceJet's workforce will also be trimmed to less than 5,000 by the end of this year, down from about 5,600 at the start of 2014.
“Key trends are positive,” said Kapoor. “Next quarter through calendar 2015 could mark the period that the turnaround becomes visible.”
