With the original co-founder of SpiceJet, Ajay Singh, back in the pilot’s seat, there are positive indications that SpiceJet could be a successful turnaround story in the coming months. The external environment for the aviation industry has improved with the fall in crude prices and the consequent drop in aviation turbine fuel, the prices of which were the highest in the world as far as commercial fuels go.
The Indian economy, too, is in better shape than it was earlier. However, fuel cost, which forms 45 per cent of an airline’s operating cost, is just one of the systemic problems crippling the industry. It also faces high operation costs, like airport charges, cargo-handling charges, parking charges, etc., while having the lowest fares on an average. Mr Singh is known as a no-nonsense, hands-on man, and with his good equation with Prime Minister Narendra Modi (he had coined the slogan “(Ab ki baar, Modi sarkar)” and the government, he might even be able to help change the fortunes of the Indian aviation sector.
The good news is that the Modi government is aware of the systemic flaws, unlike the Manmohan Singh government that did nothing about it for 10 years. There are indications that the government will hasten the process of giving the green signal for the takeover of SpiceJet by Mr Singh, who is expected to bring in a few new investors. The Modi government has to be complimented for not letting SpiceJet go the Kingfisher way as it would have not only dented the country’s image, but caused untold hardships to the staff and others associated with the airline.
