MC Interview | SpiceJet turnaround on track, 70% of claims with lessors and vendors resolved: Ajay Singh

Ajay Singh, Chairman & Managing Director, SpiceJet

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Budget carrier SpiceJet, which recently raised Rs 3,000 crore through a qualified institutional placement (QIP) of shares after a near-death experience, aims to go cash-flow positive by March 2025, according to Chairman and Managing Director Ajay Singh.

In an exclusive interaction with Moneycontrol, Singh shared that the struggling airline’s efforts to turn around has been making steady progress with sustained support from stakeholders and customers.

Here's an excerpt from the interaction:

You have been interacting with stakeholders for some time now. How has been their response to your strategy to turn around?

Of course, there were some initial apprehensions, but the investors believed in the SpiceJet's revival and growth story and in my personal commitments. We had experienced manpower, exclusive slots, traffic rights to highly constrained and sought-after destinations, such as those in the Middle East and 28 planes on the ground that could be ungrounded with the infusion of funds.

We began investor roadshows on September 3, and by September 20, we had raised Rs 3,000 crore. The money was in the bank and it took just 17 days. This funding came from some of the biggest investors in the world and in the country.  It’s heartening, it reflects confidence in India, in Indian aviation, and in the SpiceJet management. Our stakeholders appreciate that the market in India remains significantly underdeveloped. Despite the growth we’ve seen, only 5 percent of India’s population flies. Clearly, that number is set to rise. India has about 800 aircraft. In the next 10 years, even with all the orders placed, we’ll have around 1,400-1,500 planes. By then, China will have 7,000 aircraft, and the US will have more than 10,000. Mind that gap!

At SpiceJet we know how to run an airline, even when it runs into rough weather. Also, one must remember that without SpiceJet, India’s domestic aviation market will essentially become a duopoly. We have done it before. In 2015, I faced a similar situation when we owed vendors large sums of money. I personally assured them that the payments would be made within three years, and we managed to resolve everything within two years. This time as well, most settlements are complete, and for the remaining claims, discussions are progressing. Stakeholders now see the resilience of our team and the viability of our recovery plan.

What milestones have you set for the turnaround?

This capital infusion has helped us resolve 70 percent of claims with lessors and vendors. For the remaining disputes, we are actively engaging with stakeholders, some of whom have complex internal processes requiring board or committee approvals. By the end of this financial year (March), we expect to be cash-flow positive, which is a critical milestone for our turnaround. We aim to have a fleet of 35 aircraft by the end of March 2025, 70 aircraft by the end of FY26 and 100 by the end of FY27. Additionally, we are working to resolve the remaining claims with stakeholders and ensure smooth operations. Our turnaround plan is making steady progress and, with continued support of our stakeholders and customers, we are confident in our ability to not only recover but also thrive in the years to come.

Also Read: SpiceJet shares at day's high as airline clears all pending employee PF dues worth Rs 160 crore

How do you see the government’s role in supporting the aviation industry?

The government has been proactive and aviation-friendly. They have introduced policies to enhance connectivity and ensure fair competition. Additionally, the rapid development of airport infrastructure across the country is highly commendable.

Their support during the UDAN scheme’s expansion and their efforts to address infrastructure bottlenecks at major airports show their commitment. While the government has provided moral support during our tough times, it’s also clear that they understand the importance of avoiding a duopoly. With a population of 1.4 billion, India has room for many players, and the government’s approach reflects this understanding.

What specific measures do you think the government should adopt to avoid a duopoly? 

The biggest reform required is bringing the aviation turbine fuel (ATF) under the GST framework. Airlines pay high VAT on ATF but cannot claim input credit. This anomaly doesn’t exist elsewhere in the world. While the central government and the Ministry of Civil Aviation understand the issue, achieving consensus in the GST Council has been a challenge, as some states resist including oil products under GST.

Another critical area is the expansion of the UDAN scheme. Retraction isn’t an option—it must grow to connect more underserved regions.

Additionally, we need infrastructure upgrades to transform major Indian airports into global hubs. Relying on international hubs like Dubai, Abu Dhabi, and Doha must end. Instead, Delhi, Mumbai, Bangalore, and Hyderabad should emerge as major global aviation centres.

There are speculations about potentially reducing the outlay around the UDAN scheme by the government...

The UDAN scheme is a game-changer. It has successfully connected unserved and underserved areas, driving regional development. Its expansion to include helicopters, seaplanes, and similar modes of transport is a welcome step. Take seaplanes, for example. Many countries have built thriving tourism industries around them, connecting water bodies and resorts. India, with its vast water bodies and resorts, has untapped potential in this area. In the Andaman Islands, for instance, introducing seaplanes could cut travel times from hours to just 10–15 minutes, revolutionising connectivity.

Moreover, projects like the transshipment port at Campbell Bay need robust connectivity to realise their potential. The only option now is unreliable helicopter services. We are exploring ways to enhance connectivity to such remote locations. This is critical for both economic development as well as tourism.

Also Read: Govt likely to cut FY26 budgetary funding for UDAN scheme