DGCA's order will impact our revenues: SpiceJet COO Sanjiv Kapoor

A day after the Directorate General of Civil Aviation ( DGCA) ordered the withdrawal of SpiceJet slots and limited advance bookings to a month, the carrier's COO Sanjiv Kapoor said he hoped the second of those curbs may be relaxed. In an interview to Mihir Mishra over the phone, he said that the restrictions may lead to some adjustments in the valuation of the company. Edited excerpts:

How do you plan to bring your operations in line with the DGCA order?

The regulator's order to not allow us to book tickets beyond one month is counter-productive, as it would impact our revenues. On a normal day, 25 per cent of our sale revenue is from tickets booked for travel beyond 30 days. This, however, increases to over 50 per cent when we have sales and promotional offers. The regulator's order will impact our revenues. How are we expected to make salary payments and clear other dues when the revenues are impacted? We will consult the DGCA on this and ask them to relax it.

Do you think the DGCA has been harsh on SpiceJet?

I would not like to comment on it.

What are you going to tell the DGCA when you meet its officials?

We are preparing a schedule currently, which will be truncated operations with 22 aircraft (one plane is out of commission after hitting a buffalo in Surat airport and the other is undergoing maintenance). In our schedule, we will not operate flights to five destinations that include Surat and Lucknow and the remaining destinations are being worked out. We will also share about the plans of both internal and external funding with the DGCA.

You have not been able to meet pledges made in the past such as increasing the fleet to 35 aircraft by November end.

We could not increase the fleet back to 35 because we decided not to get into any kind of short-term lease and operate a truncated schedule and add aircraft only for the long term. As far as other decisions are concerned, we have been operating flights and have been registering an increase in revenues. We are only seeking time from the authorities till we get recapitalised.

What kind of recapitalisation are you talking about?

My job, as a management guy, is to focus on operations and try to turn it profitable, which we have done by increasing our revenues year-on-year. The funding and other aspects are to be decided and worked upon by the board of the airline. I am also not allowed to share all these details on funding.

The stock exchanges were informed that you are in discussion for investments. With the truncated schedule and withdrawal of slots, would prospective investors be interested?

Whenever someone buys stake into any company, it is for the long term and not short term. The investor would look at return on investments in the long term. The kind of improvements we have seen in our operational numbers, the investment would earn the investor enough. As far as valuation is concerned, it would see some adjustments due to all this.