SpiceJet asks aviation ministry for 7,000 weekly seats to Doha; says minor stake sale close

May 24 2014, 13:16 IST
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Move comes amidst rumours of Qatar Airways investment, company denies. PTI Move comes amidst rumours of Qatar Airways investment, company denies. PTI
SummarySpiceJet posted a net loss of Rs 1,003 cr in FY14 on the back of currency depreciation.

SpiceJet, India's second-largest low-cost carrier, has applied to the civil aviation ministry for 7,000 seats weekly to Doha - the capital city of Qatar, its CCO Kaneswaran Avili said on Friday at an event for the launch of its new in-flight menu. The move comes even as the loss-making carrier confirmed that it soon hopes to retire part of its Rs 1,516 crore short and long-term debt after a stake sale to an investor, with reports further indicating that Qatar Airways could be this mystery partner.

“We have been in discussions with an investor and sooner or later we will announce it. I cannot name the company right now. It will be a small stake sale and retiring some of the debt will give us the confidence to focus on re-building the airline,” Sanjiv Kapoor, SpiceJet's COO said.

Industry sources indicated that officials from the state-run Qatar Investment Promotion Authority have indeed flown to India to hold talks with several airlines like SpiceJet and IndiGo, for possible investments. Incidentally, IndiGo had also made changes to its Memorandum of Association through a special resolution passed at a board meeting on April 26 that allows the company to form joint ventures or sell stake.

Most airlines like SpiceJet and Go Air have been in discussion with investors after the government allowed up to 49% investment by a foreign carriers in domestic airlines in September last year. The first to use the option was Jet Airways, which sold a 24% stake to Etihad for over Rs 2,000 crore. The policy change also encouraged new entrants, with both AirAsia (India) and Tata-SIA scheduled to start operations soon.

SpiceJet posted a record net loss of Rs 1,003 crore in FY14 on the back of currency depreciation and high fuel costs, even as total income went up 11.5% to Rs 6,356 crore.

SpiceJet shares closed 12.83% up at Rs 21.10 on Friday, on the back of a media report that Qatar Airways is likely to purchase SpiceJet's parking slots overseas. SpiceJet, however, strongly denied any such development while clarifying to the BSE, “the Company denies having any discussion with Qatar Airways for the sale of overseas slots, as reported. We also confirm that there is no truth whatsoever in the scheduling of a meeting to discuss investment plans with Qatar Airways”.

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