It’ll be tough to turn around SpiceJet without a radical reorganisation
For quite some time, the Indian aviation market was pouring over with news flashing from all across about SpiceJet looking for a stake sale, ever since the hostile winds in the sector have taken their toll. With esteemed players like Anil Dhirubhai Ambani Group, Kingfisher Airlines and even Jet Airways competing to gain control, speculations abounded on who will finally relish the spicy taste of this airline company. Finally, investing firm WL Ross & Co. LLC gets to be the “lucky” one. The company has recently invested some $80 million in SpiceJet and will own close to 15% stake. But will SpiceJet be able to decisively clear the air pocket with this investment?
The industry challenges remain the same as before the deal, namely the convergence of a high cost environment and slowing demand. However, the deal will provide some cash flow relief and additional time for the carrier to develop an effective strategy to navigate the difficult industry conditions,” comments Binit Somaia of Centre for Aviation.
For quite some time, the Indian aviation market was pouring over with news flashing from all across about SpiceJet looking for a stake sale, ever since the hostile winds in the sector have taken their toll. With esteemed players like Anil Dhirubhai Ambani Group, Kingfisher Airlines and even Jet Airways competing to gain control, speculations abounded on who will finally relish the spicy taste of this airline company. Finally, investing firm WL Ross & Co. LLC gets to be the “lucky” one. The company has recently invested some $80 million in SpiceJet and will own close to 15% stake. But will SpiceJet be able to decisively clear the air pocket with this investment?
The industry challenges remain the same as before the deal, namely the convergence of a high cost environment and slowing demand. However, the deal will provide some cash flow relief and additional time for the carrier to develop an effective strategy to navigate the difficult industry conditions,” comments Binit Somaia of Centre for Aviation.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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