Latest Spicejet News: Logistics Arm Set to Bail It Out

August 31, 2021 at 14:02 PM EDT

Following the various world civil aviation regulators including the U.S. Federal Aviation Administration (FAA) lifting the orders that suspended Boeing 737 Max operations for airlines under their jurisdictions, its suspension in India is set to be lifted too.

NC airways spice jet news reports that the Indian government and its aviation department seem to be pleased with the efficiency of the Boeing 737 MAX ever since its ungrounding in Europe and the USA. The much-hyped plane appears to be coming nearer to being recertified to fly. The US planemaker, Boeing, has additionally met India’s prerequisites, particularly setting up a 737 MAX simulator in the country.

Although at the moment, only one Indian airline – SpiceJet – has the Boeing 737 MAX in its fleet, the ungrounding may just upload self-assurance for brand new orders to be placed.

NC airways spice jet news can authoritatively report that the Boeing 737 MAX could be in for a boost of self-assurance quickly, as media has been reporting that India’s aviation ministry, the DGCA, is nearly able to approve it to fly giving a spice up to Boeing’s presence in the country.

Although recertifying the MAX shall be welcomed by Boeing, the speedy impact can be small. Only SpiceJet operates the kind, with its current fleet of 13 idling at the floor at airports at Delhi, Kolkata, Mumbai, Ahmedabad, Hyderabad, Chennai, and Bangalore.

Some analysts have opined that even if the grounding is lifted, it’ll take SpiceJet several weeks to go back to its fleet to the provider. Pointing out that at least a month shall be needed to make them airworthy. And further stating that SpiceJet may have more losses if the Boeing 737 MAX is ungrounded since SpiceJet remains to be locked in discussions over a reimbursement with Boeing. As an outcome, the process may well be additionally extended.

This analysis seems to be on point as recent events have shown. SpiceJet shares had fallen 25.1% this year alone compared to a 1.3% rise in shares of rival Indigo’s owner InterGlobe Aviation (INGL.NS).

But it seems that the management of SpiceJet has found a way to end the free fall. To come back strong, SpiceJet plans to transfer its cargo and logistics services to its freighter subsidiary SpiceXpress subject to shareholders’ approval. The financially-strained airline says its logistics business has been valued at Rs 2,555.8 crore and the purchase consideration for the same shall be discharged by SpiceXpress by the issuance of shares of SpiceXpress to SpiceJet.

SpiceJet CMD Ajay Singh said: “The low-cost carrier of India, SpiceJet, hopes that its Boeing 737 MAX would soon make a comeback. Its recertification and its subsequent return to service would be a major milestone that shall eventually change the game in the domestic airline sector.”

NC airways spice jet news reports that while SpiceXpress will operate as a separate entity, SpiceJet will continue to provide certain transportation services, ground and logistics support, management services, sharing and provisioning of resources to SpiceXpress.

In the quarter ended June 30, 2021, the airline’s logistics arm reported a profit of Rs 30 crore and a 285% increase in revenue to Rs 4,730 million, over Q1 last fiscal’s Rs 166 crore. The logistics arm has a network across 68 domestic and over 110 international destinations including the US, Europe, and Africa.

India’s Minister of Civil Aviation VK Singh has said that SpiceXpress & Logistics, the cargo division of SpiceJet (SG, Delhi Int’l), is among four companies that have applied for no-objection certificates to launch scheduled air operations.

Singh underlined during a hearing in the Lok Sabha (the Indian parliament) that the application was necessary to proceed with the launch of a scheduled airline. However, non-scheduled operations can be permitted without such a document.

While he did not go into any further details, the application indicates that SpiceJet’s cargo subsidiary, in addition to being a company separate from its mainline parent, will also have its own AOC. Currently, the LCC operates three B737-700(BDSF)s and two B737-800(BCF)s under its own AOC alongside its passenger aircraft, even though they are branded separately.

Hopefully, the 737 Max with SpiceJet livery will return after taking some more time till domestic Indian aviation and SpiceJet steadiness sheet change into solid.

Join us today at NC airways spice jet news for more latest and updated news on SpiceJet.

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