Air India a fantastic asset but too large a gamble for SpiceJet, says Ajay Singh

By Dhirendra Tripathi


Dhirendra Tripathi

Moneycontrol News

Reams have been published on the role Ajay Singh played in ‘Abki Baar Modi Sarkaar’ – the slogan that has few parallels. He followed up with another success -- one that enriched him personally as well -- returning in 2015 to take over SpiceJet, and how. It’s then natural that his name comes up every time the list of potential bidders for Air India is discussed, notwithstanding his umpteen denials in bidding for the airline.

Talk to outsiders, and they all point to Singh as the dark horse that could walk away with the loss-making state-owned carrier that still carries some jewels -- read international routes. Singh’s vehement and unwavering denials notwithstanding, it’s his proximity to powers that is the reason behind his name always lurking around in all discussions surrounding Air India disinvestment.

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Here in Hyderabad on the inauguration of ‘Wings’ -- a four-day annual jamboree on India’s aviation sector -- Singh’s astute understanding of the country’s political cauldron comes to the surface now and then. Known to be close to the country’s ruling party, he measures his words but betrays his mind on the 2019 elections.

The promoter-turned-saviour, and current Chairman and Managing Director of SpiceJet is constantly interrupted by calls on his mobile during the interview with Moneycontrol and it’s getting him angry, a business matter not going entirely his way it seems. So we are quickly on Air India. This time, he expands a bit on why there is little chance he would bid for Air India.

“What happens to the aircraft that they probably bought at a price which is higher than normal? What happens to engineering contracts which perhaps could be at a price which could be much higher than what you would commercially pay today? What’s going to be the status of employees, the ones that may not be as useful for the corporation anymore? It’s too large a gamble for a company like SpiceJet. It’s a fantastic asset for somebody who can play a long game,” he says.

The question then veers to what he plans to do with the fuel-efficient Boeing 737 MAX narrow-body planes that will start arriving from August – since 2014, SpiceJet has placed two orders with the US-based manufacturer for 205 long-range planes comprising 737 MAX 7 and 737 MAX 10 aircraft combined.

“We really don’t care whether they are domestic or whether they are international routes. We want to fly profitable routes. What happens with Max is of course is it gives us some additional range. So the plane can fly longer and when it can do that, it obviously more opportunities open up on the international side that didn’t exist so far. So we will take a call on the routes. Some of those will be domestic, some will be international,” he says.

Singh reveals 15 such planes would get added to the fleet by March 2019.

He says SpiceJet would look to fly the 737 MAX on routes that were at least five- to six-hour-long and that meant routes like Delhi-Colombo would be on its radar. Funding for 2019 and 2020 deliveries taken care of, the company would now start the process for financing of the planes scheduled to join its fleet 2021 onwards, according to the Chairman and Managing Director of the low-cost carrier.

He says the company is also interested in flying long-haul routes -- flights to at least Europe besides of course America -- and is looking at both Airbus and Boeing planes for that wide-body initiative.

“Five or six hours is probably not long-haul anymore because this is something that you do now with the new narrow body aircraft. By long haul, you typically mean flights to western Europe or to US. Those are long haul flights,” he explains.

Flying long-haul again brings Singh’s nationalistic instincts to the fore.

“For how long are you going to keep exporting your hubs to Dubai and Abu Dhabi and Qatar, to Doha and the southeast Asian nations? It doesn’t make any sense,” he argues in reason to develop Indian airports as hubs for international flights.

He says if the government wants tourism to develop in India, it is time it built airports here as hubs so Indian airlines can take passengers from India to different parts of the world.

As Singh pitches to fly more and more Indians abroad, he also has his eyes on having an international service that is pretty common abroad and that’s WiFi in planes. He will revert very soon on that, the father of many successes says.