The Kalanithi Maran-promoted no-frills carrier SpiceJet on Wednesday said it has not yet started talking to any foreign airline for investments, though it’s very much on its agenda. Speaking on the sidelines of the company’s annual general meeting, CEO Neil Mills said that it would consider diluting its equity should a good deal come its way as it is not desperate to raise funds.
The government had on September 14 allowed foreign airlines to pick up to 49% stake in Indian carriers and analysts see SpiceJet as an attractive bet for foreign aviation firms.
“We don’t have any cash-flow crisis. We haven’t had any formal talks with a foreign airlines yet,” Mills said, adding that tapping investments from foreign airlines or accessing private equity funding are the options before the company.
“The airline will consider diluting stake to another airline only if a good deal comes through. Be it dilution to a foreign airline or via PE route, fund raising will only be done if it makes economic sense to the shareholders and company,” Mills said.
He said that SpiceJet is looking at importing fuel directly in next few months for which it has already got the approval.
Justifying the discounts on fares being offered by rival airline companies, Mills said SpiceJet will have to react to competition. Providing a discount beyond 30 days? advance booking is welcome, however increased discounting will push airlines into a crisis, he said. SpiceJet will soon announce a discount of up to 40% on the basic fare, the CEO indicated.
The Wall Street Journal had on Wednesday reported that the airline was in advanced discussions with two private equity investors to raise at least $50 million. According to reports, the airline needs up to $100 million to make a part payment for its $446 million order for 15 planes from Bombardier.
SpiceJet returned to profitability after five successive quarters of losses at the end of June quarter.
