Case Study Of Spicejet
SpiceJet Ltd. in 2016: Will it Sustain Profitability?
_____________________________________________________________________________
“We had inherited a deeply distressed company last year. We are delighted that we have made significant progress both financially and operationally, have significantly strengthened our balance sheet. By taking the one-time expense, we have now accounted for all legacy issues and are ready to start on a clean slate with even greater confidence.” -Ajay Singh, MD
On 19 May 2016, SpiceJet reported a profit of Rs. 73 Crores for the fourth quarter of financial year 2015-16 . It was the fifth consecutive profitable quarter since December 2014 when the company faced challenges. The reported net profit for the year …show more content…
It was the only Indian airline which was profitable among the listed airlines. In 2010, Kalanithi Maran, CEO of Sun TV Network's, bought 37% stake in Spicejet from its promoters Bhupendra (Bhulo) Kansagra and Wilbur L Ross for around Rs 800 crore. In 2012, the airline bagged the prestigious India’s International Low Cost Carrier of the Year by Travel Agents Association of India. It celebrated a culture of exuberance and flamboyance. Its cabin crew celebrated Holi by dancing on board. The airline introduced 'weekend uniforms' for employees— colourful tops paired with jeans — and played rock songs on flights. SpiceJet was India’s second most favourite airline. However, owing to increase in global crude oil prices and a number of other reasons, in 2012, SpiceJet suffered huge losses of Rs. 26.35 Billion (US$390 Million). Despite the losses, Kalanithi Maran invested Rs 1 Billion (US$15 million) in the airline and increased his stake in the airline. In 2013, SpiceJet was in talks with Singapore Airlines, Tigerair and established its first interline pact. By the end of financial year 2014-15, owing to frequent flight cancellations, the airline suffered a loss of
_____________________________________________________________________________
“We had inherited a deeply distressed company last year. We are delighted that we have made significant progress both financially and operationally, have significantly strengthened our balance sheet. By taking the one-time expense, we have now accounted for all legacy issues and are ready to start on a clean slate with even greater confidence.” -Ajay Singh, MD
On 19 May 2016, SpiceJet reported a profit of Rs. 73 Crores for the fourth quarter of financial year 2015-16 . It was the fifth consecutive profitable quarter since December 2014 when the company faced challenges. The reported net profit for the year …show more content…
It was the only Indian airline which was profitable among the listed airlines. In 2010, Kalanithi Maran, CEO of Sun TV Network's, bought 37% stake in Spicejet from its promoters Bhupendra (Bhulo) Kansagra and Wilbur L Ross for around Rs 800 crore. In 2012, the airline bagged the prestigious India’s International Low Cost Carrier of the Year by Travel Agents Association of India. It celebrated a culture of exuberance and flamboyance. Its cabin crew celebrated Holi by dancing on board. The airline introduced 'weekend uniforms' for employees— colourful tops paired with jeans — and played rock songs on flights. SpiceJet was India’s second most favourite airline. However, owing to increase in global crude oil prices and a number of other reasons, in 2012, SpiceJet suffered huge losses of Rs. 26.35 Billion (US$390 Million). Despite the losses, Kalanithi Maran invested Rs 1 Billion (US$15 million) in the airline and increased his stake in the airline. In 2013, SpiceJet was in talks with Singapore Airlines, Tigerair and established its first interline pact. By the end of financial year 2014-15, owing to frequent flight cancellations, the airline suffered a loss of