Ad Here  
January
February
March
April
May
June
 
 
Samarapungavan and Sankarabharanam The year of resurgence... Powering industrial dreams... Water, water everywhere… Focus on increasing ethanol production... Knitting for the globe Changing face of Bhiwadi Aavin leads second milk revolution The Indian punch to global FMCG giants! Dynamic pricing is so destructive! No break for growth... TEAM BUILDING AND NURTURE LEARNING… Needed – a strong machine tool industry When Chennai caught up with Petro-boom... Give fridges and washing machines free... The city never sleeps Platinum years of engineering innovation, building skills... A silent revolution at Sowripalayam To make companies TN their home... ‘Swachh’ city... Health insurance on growth curve Ports-gateways to trade... Marching Towards Navratna Windfall in locked lands Growing industrial outpost Weaving wealth... Safe bet on solar Farmer’s Friend All that glitters… Mediville amidst a modern industrial complex Queen of industrial clusters Textiles: a stitch in time Pearl city to port city Schwing Stetter forays into tower crane business Chaos at Chettinad house I scream... Bonanza in locked lands... Bland skies henceforth? Tractor Industry in low gear TN lost several Tata projects… High sugarcane prices crush industry Tap the big land resource Manpower for plastics... Sugar as a byproduct of sugar mills… LMW: Spinning Success... Cognizant to buy out TRiZetto for US $ 2.7 Bn Radiant Rajasthan... Centre of modern industrial temples Largest blast furnace at Burnpur Indian majors’ industrial hub Yen for research and development Unique Tirupur water supply scheme Amazon runs into trouble with Karnataka government Power position brightens Rise and fall of India’s calcium carbide industry Our own Silicon Valley Bitter state of the sweet sector Kalinga Plant ready to ROLL Weaving knowledge and wealth Changing horizons.... Automatic cars zip ahead... Silk city to auto city On the banks of Bhavani Crafting spaces to excellence A positive sign for Make In India
 
Bland skies henceforth?
This jet has seen one spice too many. The Marans may have scaled the Sun with their television network, but the stars are now too forbidding on the Maran brothers.

It now looks like SpiceJet may go belly up and the Aircel-Maxis alleged money-laundering case might blow up on the Marans. Probably their drawing room discussions are about how to source working capital to keep their jet flying and on the other to avert the threat from Enforcement Directorate attaching assets worth Rs 700 crore.

Even as the low cost carrier showed huge debts of over Rs 1000 crore in its balance sheet and struggled with working capital financing,the DGCA came out with a string of admonitions.  It withdrew 186 flight spots, barred the airline from issuing tickets for travel beginning January, asked the airline to clear salary dues of employees, asked them to file a convincing schedule to clear its dues to various stake-holders including airports and oil companies.

Interestingly only in late November, the monarch of stock markets Rakesh Jhunjhunwala, bought 75 lakh shares of Spicejet for Rs 13.4 crore in the market sending the share shooting by 18.4 per cent.  But soon they began to plummet. Even a rookie wouldn’t have touched the stock with a barge pole given that Spice Jet wasn’t keeping well for quite some time. Continued complaints of not meeting schedules, poor service, and inattentive staff have been on the run in the social media. The star investor counted on the falling crude oil prices but didn’t expect the company to slip before that.

Unusually, since the time the bad news broke out, the stock prices of Jet Airways and IndiGo have been on the rise. It is business and elimination of a competitor means additional breathing space but with the entry of AirAsia the competition has stiffened and low-cost-carriers are further drawn into the race to have the larger piece of the cake. The domestic sector is promising a good growth potential of 16 per cent.

The facts of the case of Spicejet are very close to that of Kingfisher and there are not many options open to Maran but for infusion of more capital. It is a pity that despite bringing in Rs 5 billion as equity in the recent quarters it has come to this. The CFO of Spicejet has admitted to a cash crisis but has sought time to arrange for cash and has assured to clear all the dues.

 

LCC – a cheap, costly alternative

Do we blame it on the business model of operating as a low cost airline? If it was that risky why do we have new players venturing into it?

Since the game is entirely played on the lines of cost, it is crucial to keep cost in check

ALWAYS in ALL-WAYS. Keep controllable cost under control and plan sufficiently for uncontrollable costs like buying aircraft in the future.

Frequent regulatory issues, changes in taxes and fuel price fluctuations are all to be kept under constant monitoring apart from delivering the best. Part of the Sun-Group family with Kalanithi Maran as the Head of the Family, spicejet has had the most of domestic passenger share. We can only hope with all our heart for a white knight to come by to keep the skies spicy. In a competitive market you win accolades if you do, no one sheds a tear if you die.

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com