Ajay Singh, chairman and managing director of SpiceJet, has said that the low-cost airline was too small to take over and turnaround Jet Airways, which needs a deep-pocketed strategic investor.
In an interview with business news channel, CNBC TV18, Singh said that SpiceJet has leased 28 aircraft, including Boeing 737-800 NG and Bombardier Q400s, from Jet Airways’ grounded fleet so far and plans to add 15 more in the coming weeks. He added that SpiceJet has hired around 1,000 employees, including pilots and cabin crew, from Jet which temporarily suspended all operations from April 17.
“We have signed LoIs (letters of intent) for 28 Jet aircraft and we are starting to induct those aircraft tomorrow. We are in discussion to add 15 more Jet aircraft so it should be around 40 aircraft in all.
“These planes are going to need people to fly them and who better to fly them than people who are already trained to do it. We have recruited about 1,000 of Jet’s staff and as and when we require more people, we will do it,” Singh told the business channel.
When asked by the channel if SpiceJet would be interested in bidding for Jet, Singh said, “SpiceJet is too small to turnaround operations like Jet Airways. Jet Airways needs someone with deep pockets to turn around … Would not want SpiceJet to have any financial engagement in Jet Airways bidding process.”
Singh said SpiceJet had evaluated Jet during the preliminary round of bidding but it did not move forward due to huge liabilities of the full-service carrier. He pegged Jet’s total liabilities at more than Rs 25,000 crore, which includes Rs 14,000 crore of dues to vendors. Jet’s gross debt at the end of December 2018 quarter stood Rs 7,654 crore.
“We were among the first to be approached to participate in the bidding process for Jet. The big deterrents are really the big liabilities that Jet has accrued over this time frame. In our opinion, those liabilities are close to Rs 25,000 crore or even higher. This is our estimate, we have seen the number quite carefully. There were vendor liabilities close to Rs 14,000 crore and advance from sale of seats which will have to be paid back to customers as well,” he stated. —FE
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