BELEAGUERED Indian budget airline SpiceJet announced plans on Thursday (January 15) for a change of ownership in a bid to turnaround the carrier's fortunes after months of struggling to stay afloat.
Co-founder Ajay Singh has agreed to buy a majority stake in SpiceJet from its billionaire owner Kalanithi Maran and his KAL Airways as part of plans to revive the no-frills airline, one of India's leading carriers.
The deal will still need approval from the civil aviation ministry as part of SpiceJet's “reconstruction and revival” plan, the airline's board said in a statement to the Bombay Stock Exchange.
It did not disclose the financial details of the deal.
Maran and KAL Airways own about 53 per cent of SpiceJet with the stake worth more than $80m (£52.59m), according to local media estimates.
“The whole deal will take a few days to go through since there are procedures to be followed with the government,” Sanjiv Kapoor, SpiceJet's chief operating officer, told reporters.
“We apologise to our customers for the difficulties they have faced while flying with us and we expect to resume normal operations in a short while.”
SpiceJet has for months been struggling to keep flights operating as debts pile up. The airline was briefly grounded last month as suppliers refused to refuel planes due to unpaid bills.
Billionaire Maran earlier declared that he couldn't afford to bail out the airline after spending hundreds of millions of dollars on the carrier.
Under the terms of the new deal, the media mogul would to transfer the ownership, management and control of SpiceJet to Singh, who helped set up the airline in 2005.
India's aviation market is expected to be the third-largest globally within a decade, but the sector is now plagued by losses stemming from hefty operating costs and bruising fare wars.
But this has not discouraged new entrants. Low-cost carrier AirAsia India started flying last June and Vistara, owned by Singapore Airlines and India's Tata conglomerate, took off on its maiden flight last week.
