The Hindu Business Line : SpiceJet to lease 2 more Boeings — IL&FS picks up stake in owner Royal Airways

LOW-COST airline SpiceJet has decided to take two more Boeings on lease, while IL&FS has picked up a small stake in Royal Airways, which owns the airline.

Three FIIs, Citigroup, Goldman Sachs and ABN Amro, have also doubled their stake in Royal Airways to around 9 per cent, Mr Ajay Singh, Director of the airline, told Business Line. Royal Airways is the only listed airline company in the country.

The NRI group led by the Kanasagra family holds about 40 per cent stake.

Mr Singh said that once the operations start in May, it was necessary to have enough aircraft to service the routes instead of waiting for the new Boeings. SpiceJet will kick off operations in May with three leased Boeing 737-800s.

Two more of these aircraft will joint the fleet in the second half of the year.

Spicejet has placed orders for 10 Boeing 737-800s worth about Rs 2,750 crore.

Mr Singh said IL&FS had been given a stake of about 3 per cent in the airline. "We wanted them to be part of our airline and hence we had offered them the stake," he said.

Mr Singh said the focus will be to fly on routes where the train traffic is heavy.

"We may not touch all metros initially. But, we will try to connect those places where train traffic is heavy," he said. He added the airline would expand its network gradually.

Mr Singh said the airline, which raised over Rs 100 crore recently, will not raise funds from the public again for acquisition.

He said that the airline would tap international agencies to fund the acquisition of aircraft. he said.

He refused to comment on whether the airline would lower fares than that of Air Deccan.

The airline hopes to explore all avenues to reduce overheads. Crediting Air Deccan with opening a new segment of passengers, Mr Singh said low cost was the only way to get more passengers to fly.

"There is a huge demand out there and very few airlines to tap such a significant chunk of passengers," he added.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Jet Air IPO subscribed 4.25 times on first day

SpiceJet to lease 2 more Boeings — IL&FS picks up stake in owner Royal Airways

Kingfisher Airlines to buy 3 Airbus aircraft

Jet Airways gets nod to fly to US

Lufthansa keen to build on multi-hub strategy

Centre plans equity support for minor ports

Unshredded metal scrap imports at Nagpur ICD too

Concor shelves cold chain plan

Correction

Anti-lock braking system may be mandatory for trucks