SpiceJet staff get booster dose from COO Sanjiv Kapoor
Singh and other investors plans to put in Rs 1,500 crore in three tranches into the airline. The first is likely to come in a day or two, Kapoor wrote.
“With the change of ownership and the return of Ajay as promoter, we need to take it (service and operational levels) up a few levels…the bounce is coming back to our feet, but we need it to come back even stronger,” he wrote in an email.
The pep talk comes a couple of days ahead of the first fund tranche into the beleaguered airline from its new majority shareholder.
A burden of previously unpaid taxes, tough competition and its own throwaway discounts pushed SpiceJet into its worst phase in December. Its cash reserves were razed. It defaulted on lease payments and return 20 planes to lessors.
It delayed salaries twice, cut more than 2,000 flights and appealed to the government for relief from state-owned oil refiners. SpiceJet was rescued last month by Singh who bought shares from the airline's former owner, media baron Kalanithi Maran.
Singh and other investors plans to put in Rs 1,500 crore in three tranches into the airline. The first is likely to come in a day or two, Kapoor wrote in his email.
"Last year we had beaten the blue airline and achieved no. 1 on time performance three months in a row. We were gaining share, reducing losses, returning to operating profits, and making our competition worry a LOT! We now need to set our targets on doing that again, and doing that consistently!"
The blue airline means Indi-Go, although Singh didn’t mention it explicitly in his email.
SpiceJet had last August toppled Jet Airways as the number two airline in India by bolstering demand via its aggressive discounted fares.
The fare, analysts said, impacted its margins as it didnt cut costs enough. Some sections of the industry also challenged its claims and the DGCA figures of best on time performance in the industry.
In the letter to his staff, Kapoor said once the money comes in, the airline will look at re-negotiating or exitting "poor contracts" which will improve cost structure. He didn't elaborate the nature of the contracts. "We are also taking a long, hard look at the Q400 fleet which has high maintenance costs (much higher than what was assured to us when we bought the aircraft), and a decision on that will be made soon. However pilots and engineers need not worry, even if we exit the fleet we will absorb them into the Boeing fleet," he said.
Kapoor said he and other members of the senior management will be visiting bases in the coming days.
"Ajay will also be communicating with all of you once the share transfer process is complete, expected in the next day or two," he said.