SpiceJet plans acquisition

Low-cost airline SpiceJet will plan to acquire another airline company after a year, according to its CEO Sanjay Aggarwal.
Mr. Aggarwal said consolidation in the airline industry would certainly happen after 12-18 months. “If and when it happens, SpiceJet would be rather a buyer than a seller,” he said.
The company registered 12.5 per cent growth in February, against less than eight per cent in September last. Low-cost carriers had a growth potential of 1.5 times of gross domestic product (GDP) growth rate.
Mr. Aggarwal said the company commenced a detailed analysis of the potential in connecting Tier-II cities and acquiring smaller aircraft for the purpose. It was also extending its services on international routes for which the company would become eligible from May 2010.
Explaining that the smaller aircraft might have 40, 70 or 100 seats, Mr. Aggarwal said 1.3-lakh passengers were being carried by all airlines in the country every day. He said there was a potential for growth, as at least 8-10 per cent of the 15 million train passengers could be attracted to use airlines.
He said the company was trying to become more passenger-friendly by addressing the needs of travellers. At present, the company was operating 115 flights with 19 aircraft. Two more flights to Ahmedabad and Bangalore were being introduced from Hyderabad.
While in the U.S. and Europe, low-cost airlines would use low-cost airports, the industry was suffering due to lack of infrastructure in India. There was no scope for minimising airport charges in places like Hyderabad and Bangalore.

SpiceJet, GoAir in talks for consolidation

Delhi-based low-cost carrier SpiceJet is in talks with the Wadia group-owned GoAir for either a merger or to acquire a controlling stake.Sources close to the development said SpiceJet CEO Sanjay Aggarwal met GoAir Managing Director Jeh Wadia to discuss a deal late last month.When Business Standard contacted Aggarwal, he said: “It is true that Jeh and I travelled together. But I cannot comment on anything relating to a deal at the moment.”He said he had “said before that there is a need for more consolidation in the market and that there will be fewer carriers than at present”.Pointing out that there are several ways of organic growth, he added that “consolidation is definitely one of them, and it may take place through a merger or an acquisition”.Wadia, however, declined to comment on the issue. “How can I comment on market speculation?” he said in reply to a question on whether SpiceJet had approached his airline for an alliance. An email questionnaire sent to him was unanswered.Sources from both companies also said SpiceJet recently made an offer to GoAir Chief Financial Officer G P Gupta to join the Delhi-based airline as chief administrative officer.On February 26, Aggarwal told an international news agency SpiceJet wanted to set up a regional airline to connect smaller cities in the country.Industry experts said another advantage of a merger would be the fact that GoAir was looking at increasing its fleet to 20 aircraft by 2011, from five at present.

Update: Spice Jet denies move to offload stake

Low-cost carrier SpiceJet, which is being eyed by other airlines including Vijay Mallya's Kingfisher, on Monday denied any move to offload stake and said it has adequate funds to fund its expansion plans.

"SpiceJet would like to reiterate there is absolutely no plan to sell any stake in the company to anybody. It is one of the best funded airlines in the country with a large cash reserve to fund its expansion," an airline spokesperson said in a statement.

(Source: ET)

Mallya approaches SpiceJet cautiously

Liquor baron Vijay Mallya’s thirst for low-cost airlines seems to have become insatiable. Kingfisher is now planning to spread its wings once again, by targeting SpiceJet.

After gulping down 26 per cent of the country’s largest low-cost airline, Air Deccan, the promoter of Kingfisher Airlines has dropped hints that he is interested in acquiring a stake even in Delhi-based budget carrier SpiceJet.SpiceJet is India's second largest low-cost airline with a market share of nine per cent. SpiceJet operates over 83 daily flights in 14 cities with 11 Boeing 737-800 aircraft.

The Indian aviation industry has already seen several mergers with Jet Airways taking over Air Sahara and the Indian Airlines being merged with Air-India. Mallya’s latest move is part of the consolidation taking place in the Indian skies.

(Source: CNN IBN)
(Contributor: Varun Gupta, Irevna Research Services)

Jet eyes stake in SpiceJet

Barely two months after the Air Sahara acquisition, Jet Airways, the country’s largest private airline, is interested in SpiceJet, the Delhi-based budget carrier.

Sources close to the developments said Jet is eyeing the stake of the Kansagra family-promoted Royal Holding Services and Gulf-based investment house Istithmar PJSC, which hold around 13 per cent each in the airline.

Jet Airways combined with JetLite (earlier known as Air Sahara) has a 29.3 per cent market share, but trails behind the Kingfisher Airlines and Air Deccan combine.

An acquisition of SpiceJet, which has a market share of 8.2 per cent, could push up Jet’s share to 37.5 per cent, which would be way ahead of the Kingfisher-Air Deccan combine’s 30.2 per cent.

Besides domestic coverage, a SpiceJet acquisition would result in synergy of engineering, pilots, maintenance, training and other operations.

(Source: Business Standard)