SpiceJet Co-founder Comes Up With A Rescue Proposal

Ajay Singh, a co-founder of budget airline SpiceJet, has come up with a rescue proposal in order to revive the cash-strapped carrier. “They want to restore normalcy of operations and restore the airline’s former scale of operations in the ‘near future’. This will include getting back aircraft from lessors. To discuss the matter with all departments concerned, a meeting will be held in the next couple of days,” said an official.

According to media reports, SpiceJet is discussing with two US-based private equity (PE) companies for investment. Reports suggest that the deal may be clinched in the next few weeks. An official in the Ministry of Civil Aviation said, “The process of due-diligence is underway. Because of Christmas holidays, it is taking some time. A deal is likely to be finalised in the next six weeks.”

PE companies like Goldman Sachs and Indigo Partners had shown interest in India’s aviation market. Kalanithi Maran's Sun Group, SpiceJet's majority owner, has expressed its inability to afford a bailout package for the airline. The group has lost $400 million since it bought the country’s second largest budget carrier in 2010.