SpiceJet: Working hard on reducing costs and recovering revenue where we can: Ajay Singh, SpiceJet
The cargo business for has done exceedingly well. That business was up more than 450% in this quarter. So, there are many positives, says Ajay Singh, Chairman & MD, SpiceJet
How is the state of aviation now? How is SpiceJet doing and what are the concerns that remain?
Things are improving, There was a complete shutdown in March last year and flying restarted in May and we started with only 30,000 passengers flying nationwide. Yesterday 270,000 passengers travelled. So it is nine times the date we restarted services. It is a positive sign but international travel remains closed and that is a matter of concern. The fact that corporate travel has significantly reduced has also led to a lowering of yields and that is a matter of concern; fuel prices are going up and that is a matter of concern too. So it is too early to say that achhe din wapas aa rahe hain (good times are back) but certainly improvement is there and we are hoping that in the next few months as international travel opens, as corporate travels restarts and as yield start firming up a little bit, the aviation world will breathe a little easier.
Do you think that by summer schedule, the pricing would be right and more importantly, will all the bigger airports open up?
Well we hope so. The concerns that some of the large airports and some of the larger states had were completely justified. Infections were rampant at that time and every state was trying to protect itself. That situation has eased a little bit now and we are hoping that as a consequence of that, the airports and the states will ease restrictions and once those restrictions are eased, certainly we expect that both traffic and yields to go up.
With respect to SpiceJet when do you expect to get a clearance for 737 MAX?
This is really for DGCA to decide. DGCA will have to take a call on when they feel the aircraft is safe enough to fly. I am sure Boeing has approached them and I am sure DGCA is working on it but as soon as they give us clearance, we will start to fly the 13 aircraft we have on the ground. Let us see but we cannot compromise safety. The 737 MAX has been cleared to fly by some of the jurisdictions but it is entirely the Government of India and the DGCA’s call on when they feel it is safe enough to fly for us.
How are you negotiating with Boeing when it comes to compensation?
We are discussing that with them. Boeing has been in a difficult situation as well but of course tremendous losses have been caused by not flying the aircraft for two years. We are talking to them and we hope that we can reach an equitable settlement with them. It needs to be kept in mind that we are their only customer in India and in this part of the world. So, there is significant and strategic importance for SpiceJet with Boeing .
The auditors have raised a going concern. Is there anything to be worried about?
Nothing at all. This is a routine practice which has been going on for a period of time. As we have shown in the results, Covid losses are reducing sequentially quarter on quarter. They have halved over the previous quarter and the previous quarter itself was a 70-80% reduction over the quarter before that. So the direction seems to be right. We are working hard on reducing costs and trying to recover revenue where we can. The cargo business for SpiceJet has done exceedingly well. That business was up more than 450% in this quarter. So, there are many positives, many new learnings as a consequence of Covid and we hope this positive trajectory continues.
