It’s not sure which of its ‘nine lives’ SpiceJet is on, but over the course of Monday, as its shares rocketed up in share value at India’s stock exchanges, what was clear was that promoter Ajay Singh has managed to get this proverbial ‘flying’ cat survive yet another fall, and live to die another day.
The tale of SpiceJet is filled with the sort of twists and turns that could impress an OTT scriptwriter, or even inspire him to write the next potboiler. Since its launch in the mid-2000s, the low-cost airline has soared the skies, faced turbulence galore, had two ownership changes, multiple court cases (many still ongoing), a streak of luck that never seemed to ditch its side, and of course, a ‘hand of god’ that always seems to help it out just when everyone thought all hope was lost.
So it was in the last few days, as the airline pulled back from a summer of misfortune — its coffers had run dry and sundry authorities ranging from India’s aviation regulator DGCA to foreign airports like Dubai and even the PF office (for not depositing employees’ PF with the authority for over two years) and taxman putting it on notice. When the Supreme Court refused to stay a high court order to ground three engines for not paying lessors, the story, already compounded with unpaid vendors and staff with salaries and perks pending, had seemed like a potent recipe for the final nose dive.
But trust Ajay Singh, close to the ruling dispensation, to pull another one out of his mystery hat. Selling shares through the QIP route, the airline raised about 3,000 crore rupees, leading to a stock rally, and more importantly, enough cash to tide over the existential crisis.
“The strong response from investors and institutions is a testament to their faith in SpiceJet’s potential to rapidly scale and become a formidable player in India’s burgeoning aviation market. This fundraise marks a pivotal moment for SpiceJet as we look to scale new heights in the aviation industry,” Singh said.
If India’s aviation scene is littered with the ones that soared high but then crashed and burned — remember the likes of Air Sahara, Kingfisher Airlines and Jet Airways, SpiceJet was a different story. Time and again, the airline faced existential crises, and time and again, it had come out by the skin of its teeth.
SpiceJet’s first brush with cataclysm was just a few years after its 2005 launch, when promoter Singh found the going tough. Marans of the Sun group, a formidable media group which was also interlinked with the then UPA government at the Centre, soon took control of the airline. However, the rise in oil prices in 2012 and beyond found the airline lurching into another round of financial chaos, with the Marans offloading the airline back to Singh by 2015.
Singh then went on an aggressive expansion plan, ordering new aircraft, snapping up old aircraft of Jet Airways as it went belly up and even rising to become the second biggest domestic airline behind Indigo, snapping up a market share of around 10 per cent around 2019.
However, two sudden whammies socked Singh into seeing buzzing bees — first was the Boeing 737 Max crashes of 2019 which grounded the aircraft type around the world — it was the mainstay of SpiceJet’s fleet, followed by Covid.
The long Covid winter saw the airline pivoting to cargo in a big way, but things were never the same. There were vendors and others knocking on the doors of the court, while the government regulator pulled up the airline for lapses time and again.
Time and again, Singh and SpiceJet have managed to survive, much like the cat with nine lives. Singh has a best-case-scenario blueprint in front of him, to use the fresh infusion of cash to pay up dues, get grounded aircraft (SpiceJet has as many as 36 planes grounded, by one estimate) running again and get new plane deliveries fast.
Beside luck, the one thing running in this ‘flying’ cat’s favour — beside a benevolent government that seems fine in giving it a long rope, is the gung-ho global investors and experts have in the immediate future prospects of Indian aviation. With a massive, yet-to-be-fully tapped market and increasing passenger numbers, India's domestic aviation can only go up, up and away, by all calculations. All Singh and SpiceJet need to do is stay alive, and keep on trying. Even after the next fall.
