The glide path to bankruptcy had become apparent. One morning, state-owned oil companies refused to refuel their planes. The airline had started gradually grounding planes. Hundreds of flights were cancelled and salaries of employees delayed. This is when Ajay Singh resurfaced, just in the nick of time for the airline.
He had co-founded Spicejet in Those were the heady days of Indian aviation that saw a sudden spurt in low-cost carriers. In , Singh exited the company and the Marans of Sun Group acquired control in In January , with the airline teetering on the brink, he bought back the company, ignoring advice from friends. The airline could be turned around, he believed. Singh executed an astute strategy aided by declining oil prices that led to several quarters of profits. For a while it seemed like he had managed to steady the ship.
Can Singh save the airline a second time is the big question now. It is nearly a repeat of LLP, have raised doubts about its ability to continue as a going concern—mounting losses have led to a complete erosion of its net worth. Most Indian airlines were loss-making ventures even before the pandemic hit.
No-frill carriers such as IndiGo and SpiceJet were exceptions. The future, meanwhile, remains uncertain given the possibility of a third wave and the risk from new variants. Rating agency Icra Ltd expects domestic air traffic to reach pre-covid levels by ; international air traffic, on the other hand, may rebound only by The firm needs capital urgently to stay afloat.
Singh, therefore, faces one of the biggest challenges of his career. SpiceJet faces headwinds that are beyond slumping air travel. Unlike , SpiceJet now has to deal with high oil prices.
Aviation turbine fuel ATF or jet fuel constituted about a fifth of total costs in and it may shoot up further this year. Besides jet fuel, the firm is also dealing with a clutch of legal cases. During this time, he helped launch DD Sports. He was also part of the team that helped plan DD news. Singh was also appointed president of the Boxing Federation of India in So I think it is worth an effort to professionalise it. Singh added that his focus would be to improve its infrastructure and ensure boxers, coaches and technical officials receive the best of training.
Click here to join our channel indianexpress and stay updated with the latest headlines. Who is Ajay Singh? A major contributor to the bottom line was the income - Rs In fact, in December , the airline was grounded after oil companies refused to refuel its aircraft due to non-payments.
After getting speedy approvals from the government, he acquired Singh nearly camped in the SpiceJet office in Gurgaon for weeks doing due diligence and taking stock of liabilities. It is like the Reserve Bank [of India] saying this bank is going to fail. It was a sure shot way of making an airline collapse," Singh told Business Today in The SpiceJet management went overboard with staff hiring till the end of At one point, SpiceJet had employed some employees per aircraft as compared to about for IndiGo.
Clearly, the new SpiceJet management realised that it has to prune its staff strength if it is to become profitable.
0コメント