Spicejet To Consider Capital Raise Amid Losses, Market Share Battle
BENGALURU (Reuters) -Indian carrier Spicejet Ltd said, on Tuesday, it will consider options to raise fresh capital by issuing securities to qualified institutional buyers amid a string of quarterly losses as competition heats up in the aviation industry.
The plan to raise capital comes as Spicejet's cash reserves dwindle and new entrant Akasa Air jostles for a share of the market while rival Air India ramps up its revamp plans with mammoth orders for new aircraft.
Spicejet's market share slipped to 7.3% in January from 7.7% in December, while IndiGo retained the lion's share of 56.3%. Akasa grabbed 2.8%, while Air India's share was steady at 9.2%, data from the country's aviation regulator showed.
Spicejet's passenger load factor, which measures the percentage of available seating capacity that has been filled with passengers, outdid rivals at 91% in January.
Last week, Spicejet postponed its board meeting to approve financial results for the December quarter to Feb. 24.
At the board meeting on Friday, Spicejet will also consider issuing shares on a preferential basis after converting outstanding liabilities into equity shares. The airline's total equity and liabilities stood at 88.11 billion Indian rupees ($1.06 billion) as at Sept. 30, while cash and cash equivalents were 66.08 million rupees.
Its losses widened in the September quarter, hit by soaring fuel costs and a depreciating rupee. The company had last turned a profit in the three months that ended in December 2021, when the industry was roiled by pandemic-led curbs.
Meanwhile, the biggest competitor IndiGo returned to profit in the latest quarter that ended in December led by increased demand for domestic and international air travel that outpaced the high fuel costs and currency volatility.
Spicejet shares have recovered sharply from multi-year lows hit earlier this month and are down around 3% thus far in the year, compared with a 7% drop in IndiGo owner InterGlobe Aviation.
($1 = 82.7630 Indian rupees)
(Reporting by Priya Sagar in Bengaluru; Editing by Savio D'Souza)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
The Battle For Depositors: US Lenders Ramp Up Efforts Amidst Rate Uncertainty
In the competitive landscape of the US banking sector, retaining depositors is paramount for lenders seeking to maintain... Read more
Beyond Capital: Unveiling The Complexities Of Bank Failure Prediction
In the realm of banking, the ability to predict and prevent failures is paramount for financial stability and consumer c... Read more
Central Banks And The Economic Horizon: Steering Through Uncertaintie
In the evolving landscape of global financial markets, the strategic role of central banks has come under intense scruti... Read more
Transforming Financial Operations With Robotic Process Automation
Author: Ricardo Goulart ... Read more
The Role Of Machine Learning In Fraud Detection
Author: Gerardine Lucero  ... Read more
Principles Of Islamic Banking And Finance
When it comes to banking, a significant new contender has entered the ring. The principles of Islamic banking and financ... Read more