Marans’ goodbye to SpiceJet is a ‘good buy’ for Ajay Singh: experts

New Delhi: Former SpiceJet co-promoter Ajay Singh’s decision to acquire the ailing carrier from Maran family is a ‘good buy’ said it also bodes well for the entire aviation industry, experts said today.

“This (the deal) is definitely a good buy for Ajay Singh as it has come at a time when the business climate looks very conducive,” Dhiraj Mathur, Executive Director at global consultancy firm PwC, said.

At present the market is under-served and demand exceeds the supply, he said. “The market looks attractive,” he added.

“So, it’s a very good move and good for the whole aviation sector,” he said.

Terming the deal a welcome development, Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG said the failure of an airline with 17 per cent market share is the last thing our beleaguered aviation sector needed.

“SpiceJet’s revival is good for passengers, employees, lenders, suppliers and the industry as a whole,” he said.

Dubey, however, said new investor Singh will have to rework his fleet, network and people strategy.

“The airline has excellent slots, brand and staff. Given the right support, the airline can rebuild itself over the next 8-12 months into a lean, mean and profitable airline,” he said.

Cash-strapped SpiceJet went back to original promoter Ajay Singh in a multi-layered deal worth up to Rs 1,500 crore, with Maran family on January 17 agreeing to cede control with transfer of over 53 per cent stake in the airline.

Singh has already said that he has drawn up a five-year plan to rebuild the carrier besides getting more investors on board to infuse funds.

Returning to a single type aircraft fleet-Boeing 737 and phasing out the Bombardier Q400s, bolstering depleted finances and bringing in operational efficiency are some of the measures likely to be part of his plan to revive the ailing airline.

As part of the deal announced, Marans would remain invested through warrants lying with them, which would result in 10 per cent stake upon conversion.