SpiceJet cuts early morning loss caused by Neil Mills exit

Moneycontrol Bureau

SpiceJet shares marginally recouped losses it made in early morning trade by falling around 2 percent to Rs 27 after its CEO Neil Mills put in his papers yesterday.

The resignation comes at a time when Malaysia’s Air Asia along with its Indian join venture partners is all set to launch a low-fare airline in India. While some industry veterans say,  the promoters did not like Mills decision to sell around  10 lakh seats at discounted rates at the beginning of the year, a few have also guessed the precarious financial situation of the airline may have prompted him to exit the firm.

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The airline has a debt pile of Rs 1429 crore and its stock has also fallen over 40 percent in the year-to-date period. If the company does not improve it financials, stock may fall further, analysts have warned.

The industry is also abuzz with rumours that promoters were upset with the poor earnings in the last fiscal when SpiceJet reported a loss of Rs 191 crore, which they blamed on the cheap ticket scheme Mills has offered in January.

Mills' exit from SpiceJet comes a few months after its chief commercial officer Harish Moideen Kutty resigned, a little over a year after he joined the company.

Kutty's resignation came days after the airline reported a more-than-expected loss of Rs 191 crore in FY2013. He was the second chief commercial officer to quit.

Mills joined SpiceJet in 2010 and was hired by Maran from FlyDubai after the media baron bought the airline from NRI promoter Bhulo Kansagra in the same year.

In the last three years, the promoters have pumped Rs 350 crore into SpiceJet, which has lost Rs 796 crore.

SpiceJet, started in 2005, has a market share of about 20 per cent as opposed to IndiGo's 30 percent. SpiceJet has 56 aircraft.