SpiceJet’s days are about to change
Before Covid, private sector airline SpiceJet had around 15 per cent share in the country’s aviation market. After this, gradually the company’s condition began to deteriorate, the company’s liquidity crisis began to increase and the company spent 5 years struggling with this problem. Then last month, the company got a big relief when it was able to raise funds of around Rs 3.75 billion (about $50 million). Now the big question is whether the company will be able to make its future history shine again as before.
The Rs 3,750 crore funding the company received in September. I needed it for a long time. Otherwise, there would often be heated arguments between the company’s employees, ranging from no pay to layoffs. This funding will help the company repay part of the loan amount, but according to an ET report, the company has a debt of around Rs 8,000 crore.
Market math has changed
SpiceJet is continuously trying to reach the pre-Covid situation. But the problem is that the country’s aviation market has changed a lot since then. Now there are only two dominant players left in the market. One Air India and the other IndiGo, the size of both companies has become so big that today it will be very difficult for SpiceJet to give them competition like it did before 2015 or 2020.
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Today SpiceJet’s share in the aviation market is only 2 per cent. While IndiGo has 62 percent and Air India 30 percent. Both companies are expanding their fleet. Every month 4 to 5 aircraft join its fleet. In contrast, SpiceJet’s 30 aircraft are grounded and it operates only 100 flights daily with 20 aircraft. The number of Indigo flights is 2,100 daily.
SpiceJet still has a chance
However, market expert Manet Pais seems quite confident about SpiceJet’s future. ET quoted him as saying in a news story that SpiceJet will do better in the next financial year as demand will peak in the October-December quarter and help many airlines make profits. Oil prices have dropped 20 percent in the month of September. This is a great relief for the entire aviation sector.
Manet Pais says SpiceJet will do better this year considering the peak period. However, this problem may arise again next year. Another analyst claims that with the new funds SpiceJet’s situation will completely change compared to the last few months. However, to sustain it in the long run, the company will have to raise at least Rs 2,000 crore more.
