SpiceJet turnaround likely in a year: COO Sanjiv Kapoor

HYDERABAD/NEW DELHI: SpiceJet will complete a financial turnaround in a year and bring in an equity partner "hopefully soon", chief operating officer Sanjiv Kapoor predicted.


"There is room for more than one successful, strong and profitable airline in India and we intend to be one of them," said Kapoor, who is a month and a half into the job at the loss-making budget airline. "The operational turnaround is already underway."

SpiceJet, which is controlled by media baron Kalanithi Maran, on Monday entered into an 'interline' agreement with Singapore-based budget carrier Tiger Airways to sell each other's tickets and transfer passengers' checked-in baggage between the airlines. Shares of SpiceJet jumped by 7.6% to Rs 16.90 on the BSE in a flat broader market.





Indian aviation companies are passing through a difficult phase, with all carriers other than Indigo making heavy losses. After the government allowed up to 49% foreign investment in civil aviation last year, Etihad has sealed a deal with Jet Airways to buy a 24% stake in the Indian carrier for about Rs 2,000 crore.

Admitting delay in roping in an equity partner, Kapoor said, "There has certainly been interest. We want to make sure whoever we partner with is the right partner for us. We should be firming up equity partner hopefully soon." He declined to comment on whether Tiger Airways was among those the company is talking to for equity partnership.

SpiceJet posted losses of Rs 559 crore in the September quarter this year, Rs 163 crore in September quarter last year and Rs 185 crore in the March quarter this year.

Bain & Co is helping SpiceJet relook it network from scratch. Kapoor said the network redesign recommendations of Bain should be ready by early January, at which point SpiceJet will start discussions with the aviation authorities and airports for revised slots and timings. SpiceJet hopes to start executing the revised network design from February.

Kapil Kaul of the Centre for Asia Pacific Aviation said he sees little revenue improvement for SpiceJet through the interline agreement with Tiger Airways. "I see more interlines and possibly, code shares but don't see any equity investments from Tiger. Revenue impact only from this interline agreement will be insignificant but as more code shares/interlines are signed, revenue impact will be visible."