SpiceJet to consider capital raise amid losses, market share battle

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

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 ($1.06 billion) as at September 30, while cash and cash equivalents were ₹66.08 million.

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.