This is when Ajay Singh resurfaced, just in the nick of time for the airline. He had co-founded Spicejet in 2005. Those were the heady days of Indian aviation that saw a sudden spurt in low-cost carriers. IndiGo, Go Air, Kingfisher Airlines and SpiceJet all started services in 2005. In 2010, Singh exited the company and the Marans of Sun Group acquired control in 2010. In January 2015, with the airline teetering on the brink, he bought back the company, ignoring advice from friends. The airline could be turned around, he believed. “There was still great potential in aviation, and oil prices were coming down,” Singh, now the chairman and managing director of SpiceJet, told this writer in 2018. “I thought nobody would blame us if the airline died but if it succeeded, we would have stories to tell our grandchildren.”
Singh executed an astute strategy aided by declining oil prices that led to several quarters of profits. For a while it seemed like he had managed to steady the ship. But now, after two waves of the covid-19 pandemic that has battered the aviation sector around the world, and oil prices soaring, it’s testing times yet again for SpiceJet. Can Singh save the airline a second time is the big question now.
SpiceJet posted its fifth consecutive quarterly loss of ₹257 crore in the three months ending March 2021, although that doesn’t reveal the full picture, as we shall see momentarily. In 2020-21, the company lost ₹1,029.89 crore, up from a loss of ₹936.57 crore in the previous year. Revenues dived 54% to ₹6,119.39 crore last year.
It is nearly a repeat of 2014. The auditors of SpiceJet Ltd, Walker Chandiok &.Co. LLP, have raised doubts about its ability to continue as a going concern—mounting losses have led to a complete erosion of its net worth. By March-end, SpiceJet’s current liabilities exceeded its…