The low cost domestic carrier, SpiceJet, is in advanced stages of negotiations for raising fresh capital from overseas investors to help fund its expansion schemes and reduce debt. “We are in advanced stages of capital infusion discussion with an external entity. When completed this will help clear up debts and arrears and build our confidence to compete more effectively with other airlines,” a spokesman of SpiceJet said. Investors from Oman have also shown interest in SpiceJet.
SpiceJet’s shares have been on the rise with new hopes of a resurgent domestic carrier with more capital flows. Equity addition is critical to SpiceJet’s operations as most of the low cost carriers experience losses due to low seat occupation, high airport user fees and rising fuel costs.
SpiceJet has suffered a net loss of over Rs 1000 crore for FY 13-14, five times that of last year’s, Rs 190 crore, because of a weak rupee and rising input costs.
The slowdown in economic growth rate and sluggish market conditions have not been encouraging for the Indian civil aviation sector.