Spreading wings

Mumbai, May 13: Delhi-based low-cost carrier SpiceJet will raise about Rs 400 crore by the year-end to fund its fleet expansion plan.

SpiceJet CEO Siddhanta Sharma told The Telegraph that the airline needed about Rs 500 crore for capital expenditure in this fiscal. The company also denied reports of a stake sale by the Kansagra family who holds about 12.91 per cent in the airline.

“We will raise about $100 million, or Rs 400 crore, towards the end of this year. We are weighing various options, including a mix of equity and debt and sale and leaseback of aircraft. Going by the current conditions the last option looks to be the most viable for the fund-raising plan,” Sharma said.

SpiceJet has a fleet of 18 aircraft, flying to 18 destinations within the country and doing 110 flights daily. The airline said it would augment its fleet size to 23 by the year-end.

Stake sale denied

Sources said the Kansagras might not consider a stake sale at this moment as the valuations did not look attractive. The company also denied any formal discussion about a merger with Naresh Goyal’s budget airline JetLite.

“Although we cannot comment on the promoters’ intentions, the speculations of a stake sale by the Kansagras are false. As far as a merger with JetLite is concerned, there has been no official development on this front,” Sharma said.

SpiceJet reported a net profit of about Rs. 9.34 crore for the quarter ended December 2007. The airline is likely to suffer a loss for the fourth quarter ended March.

Sharma said SpiceJet’s operating costs had increased with surging oil prices. Though the company has raised the fuel surcharge whenever the price of aviation turbine fuel has gone up, yet the rise is not sufficient to offset the fuel price hike.