SpiceJet in ‘Ad­vanced Talks’ to Raise Funds, Re­jigs Top Deck

Air­line to hit the funds trail af­ter au­di­tor raises con­cerns over its abil­ity to stay afloat

The Economic Times - - Companies - OUR BUREAU

Low-cost car­rier SpiceJet on Tues­day said it is in “ad­vanced talks” for rais­ing funds, a few days af­ter it an­nounced high losses leading its au­di­tors to re­port se­ri­ous con­cerns on its abil­ity to stay afloat. “We are in very ad­vanced stages of a cap­i­tal in­fu­sion dis­cus­sion with an ex­ter­nal en­tity that when com­pleted will help us clean up our ar­rears and rebuild with con­fi­dence,” a SpiceJet spokesper­son said on Tues­day with­out elab­o­rat­ing. But a source in the know said it is likely in talks with a Dubai-based en­tity. The Kalanithi Maran-con­trolled air­line on Satur­day said its quar­terly loss rose five times to .` 321 crore while an­nual losses surged more than five-fold to a record high of .` 1,003 crore. The air­line’s li­a­bil­i­ties ex­ceeded its as­sets by .` 1,019 crore. The car­rier said it has been un­der­tak­ing ma­jor cost-cut­ting mea­sures to shore up its fi­nances. “Our re­struc­tur­ing plan in terms of over­all rev­enue and cost strat­egy is only just start- ing to take ef­fect, and will in­ten­sify in the com­ing days; costs es­pe­cially tend to be “stick­ier” than rev­enues and in the short-term tend to go up as there are re-struc­tur­ing costs that are in­curred. We will be go­ing af­ter cost op­ti­mi­sa­tion on a war foot­ing now,” said a spokesper­son for the com­pany. Sources in the know said the com­pany may look to ra­tio­nalise staff strength. The spokesper­son, how­ever, said: “There is no ar­bi­trary tar­get for any­thing. We are look­ing at all ways to op­ti­mize and re­duce costs. We are not at all look­ing at mass cuts of our staff.” Mean­while, SpiceJet’s tight- fisted mea­sures have spooked its em­ploy­ees. For in­stance, more than a score of pi­lots have re­signed from the air­line in the last few months on lower-than-mar­ket pay scales. “We have been promised by the man­age­ment since De­cem­ber that our salaries would be raised. That didn’t hap­pen,” said a pi­lot who re­signed in the fourth quar­ter this year to join Jet Air­ways. Un­til re­cently, SpiceJet paid pi­lots at least .` 1 lakh less than cur­rent mar­ket rates. “The con­fir­ma­tion on pay ad­just­ment rel­a­tive to the mar­ket was com­mu­ni­cated to them (the pi­lots) last week. Pi­lot at­tri­tion has ac­tu­ally come down in the last three months com­pared to pre­vi­ous three months; many have told the com­pany they have no plans to move any­where, they see pos­i­tive mo­men­tum and will do what­ever they can to help SpiceJet suc­ceed,” said the spokesper­son. He didn’t elab­o­rate on the jump but said it was a “mean­ing­ful amount”. Also on Tues­day, SpiceJet an­nounced it pro­moted its for­mer head of ground and air­port ser­vices Ka­mal Hin­go­rani to the newly cre­ated post of se­nior vice-pres­i­dent and head of cus­tomer ex­pe­ri­ence. Mean­while, the el­e­va­tion of chief op­er­at­ing of­fi­cer San­jiv Kapoor to CEO is now pend­ing ap­proval at the min­istry of home af­fairs, said a per­son in the know. Kapoor be­ing a US cit­i­zen, his ap­point­ment would need spe­cial clear­ance.

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