Even as it is expected to post a net loss, the Delhi-based no-frills airline SpiceJet is reducing its financial year to ten months ending March 31, 2007, for operational reasons.
SpiceJet has followed financial year starting June. "For operational reasons and reporting convenience, we are reducing this financial year to 10 months ending March 31.
"The next financial year will ideally start from April," SpiceJet chief executive officer Siddhanta Sharma said. He said the airline might post a small operating profit during the ten-month period.
SpiceJet scrip rose 2.21 per cent on the Bombay Stock Exchange on Wednesday following rumours that the Tata group, which currently holds 7 per cent, may hike its stake to 11 per cent in the company.
SpiceJet has got investment proposals worth $180 million from various quarters, including the Tata group and Goldman Sachs.
"We are happy to welcome the Tata group on our board. But the group maintains this is a financial investment for it."
SpiceJet has got investment proposals worth $180 million from various quarters, including the Tata group and Goldman Sachs.
"We have issued 67 million fresh shares to these investors and raised $65 million, that will used for non-aircraft expenses such as modernising airport infrastructure, induction of IT systems, setting up of call centres and upgrading engineering and support centres," he said.
During the equity placement at Rs 51.36 per share, the Tata group invested $17 million, Dubai-based Istithmar PJSC $25 million, Goldman Sachs $5 million, BNP Paribas $15 million and UK-based KBC $2.5 million.
Sharma said the airline was also exploring the option of sale and lease-back arrangements or funding from the US Exim Bank for future aircraft acquisitions.
On Wednesday SpiceJet introduced two new additional daily flights on the Bangalore-Mumbai-Hyderabad routes. With the induction of its new Boeing 737-800 aircraft, the airliner will commence operations on these routes from February 4.
Currently, it is operating over 70 flights in 14 cities with a fleet of ten Boeing 737-800 aircraft.