Cash-strapped SpiceJet raises additional ₹316 crore
₹316 crore in funding, bringing the total raised through its preferential issue to ₹1,060 crore. The funding, which comes amid a severe cash crunch, will allow the struggling airline to pursue expansion plans. The budget carrier had to lay off about 15% of its staff, or about 1,500 employees, following a two-thirds reduction in its fleet size for want of funds.
The airline expects to save around ₹100 crore per year from these measures. “With this additional funding, we are well-equipped to pursue our expansion plans and enhance our operational capabilities…It has broadened our perspective on the potential opportunities ahead," said Ajay Singh, chairman and managing director, SpiceJet, in a statement. The pandemic dealt a severe blow to SpiceJet, eroding its domestic market share from 16.5% in December 2019 to 5.6% in December 2023.
The airline’s net fleet size has dropped to 41 aircraft from 120 aircraft in 2019. Of these, about 10 are in wet lease, meaning aircraft leased along with pilots and cabin crew. Additionally, it has seen its losses widen, from ₹302 crore in FY19 to ₹1,513 crore in FY23.
The airline is also embroiled in numerous legal disputes with creditors over unpaid bills. On 21 February, the airline's board of directors preferential allotment committee approved the issuance of 40.1 million equity shares to two investors on a preferential basis. Of these, Aries Opportunities Fund Ltd was allocated 40 million shares, and Payal Nitin Magiya received 100,000 shares.
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