SpiceJet’s Board Greenlights ₹30 Billion Capital Injection

SpiceJet (SG) has received board approval for a major capital raising initiative, amounting to INR30 billion (USD358 million), as of the July 23 board meeting. The airline plans to raise these funds through institutional placements to qualified buyers. This decision builds on an earlier proposal from January to raise approximately INR22.5 billion (USD269 million), with INR10.6 billion (USD127 million) already secured.

The capital injection aims to bolster SpiceJet’s balance sheet and stabilize its operations following a period of turbulence. The funds are intended to enhance operational efficiencies, support technological upgrades, and potentially fund new aircraft acquisitions. However, the specifics of the share pricing for this capital raise were not disclosed in SpiceJet’s filing to the Bombay Stock Exchange.

In terms of domestic presence, SpiceJet ranks as India’s sixth-largest airline based on weekly available seat capacity, behind IndiGo Airlines, Air India, Vistara, AIX Connect, and Akasa Air. The airline’s domestic market share has decreased from 5.4% in May 2023 to 4% in May 2024, primarily due to a significant number of aircraft being out of service.

According to ch-aviation fleets data, thirty-five of SpiceJet’s 56 aircraft are currently grounded, including various models of the Boeing 737 and the Bombardier Q400. To mitigate this issue, the airline has been wet-leasing seven aircraft, bringing its operational fleet to 28.

SpiceJet also recently released its financial results for the fiscal year ending March 31, 2024. The airline reported a consolidated loss of INR4.237 billion (USD50.6 million), marking an improvement from the INR15.13 billion (USD180.7 million) loss recorded the previous year. This loss represents the sixth consecutive year of financial deficits for SpiceJet.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com