Tuesday, March 28, 2006

SpiceJet to sell aircraft to raise resource

New Delhi: India's low-cost airline SpiceJet is back in the market hunting for funds. Only this time round, the airline - instead of offloading equity - has decided to sell off four of its aircraft to raise resources for funding its long-term growth plans.
And the resale of these mint-fresh planes in an overheated market is also helping it wipe the red ink off its balancesheet and turn profitable. Sources said, it has already sold off the first plane from its acquired fleet to Australian investment firm Babcock and Brown (B&B) and made a profit of $3-4 million from the deal.
The plane has then been leased back from B&B to be deployed on SpiceJet's domestic routes. While SpiceJet director Ajay Singh said the decision was taken to avoid further diluting promoter stake and earn a profit in an overheated market for airplanes, industry watchers blamed it on poorer-than-expected yield from operations.
28/03/06 Byas Anand/Times of India