Business: On Friday, SpiceJet’s stock experienced a 12% surge following the joint bid submission for the troubled GoFirst airline by its CMD Ajay Singh and Busy Bee Airways Private Limited.
The bid, presented by Ajay Singh in his personal capacity along with Busy Bee Airways Private Limited, outlines SpiceJet’s role as the operating partner, providing staff and services, as stated in an exchange filing.
The collaboration is expected to yield synergies, enhancing cost management, revenue growth, and a fortified market position in the Indian aviation sector for both carriers, according to SpiceJet.
The airline further highlighted the strategic significance of serving as the service provider, emphasizing the potential for revenue expansion. By leveraging its established infrastructure and operational capabilities, SpiceJet aims to optimize resource allocation and achieve cost efficiencies across functions such as maintenance, ground handling, and engineering.
As of 1510 hours on Friday, SpiceJet’s stock on BSE showed a significant 12% increase, reaching Rs 71.
SpiceJet emphasized that coordinated route planning initiatives would boost passenger traffic and drive ticket sales for both itself and the newly bid-for airline. Aligning flight schedules and destinations strategically is expected to allow both SpiceJet and the new airline to capture a larger market share and effectively meet diverse passenger needs.
SpiceJet’s CMD, Ajay Singh, expressed optimism about the potential revitalization of GoFirst, envisioning close synergy with SpiceJet to the benefit of both carriers. Singh highlighted GoFirst’s assets, including coveted airport slots, international traffic rights, and an order for over 100 Airbus Neo planes, along with its reputation as a trusted brand among flyers.
Currently undergoing a revival plan, SpiceJet has completed the first tranche of capital infusion totaling Rs 744 crore, with additional subscriptions pending regulatory approval. The company has initiated the process to raise an additional Rs 1,000 crore and holds valid shareholder approval to raise up to Rs 2,500 crore through QIP.