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We have reduced liabilities to Rs 1,000 cr in a year: Ajay Singh

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A year ago, SpiceJet was on the verge of closure. The airline was defaulting on payments and lessors were in a scramble to take their aircraft back. In less than 12 months, Ajay Singh, co-founder and promoter of low-cost carrier SpiceJet, has brought the airline back from the brink of bankruptcy.

In an interview with Business Standard Singh explains how he managed to revive the ailing airline and bring down liabilities to Rs 1,000 crore from Rs 2,200 crore a year ago.

“We had to bring back the confidence of our consumers,” he says. “We also needed to optimise the network and revenues. We focused on the revenue side a lot. Last year, the airline’s on-time performance was 40 per cent and it is now 86 per cent; load factors are up to 96 per cent. We were operating 220 flights a day last year and now we are operating 300 flights a day.”

Singh also explained the sight on defaulting. “On defaulting In January, the airline had defaulted on payment of Rs 275 crore to Airport Authority of India (AAI). The question asked in Parliament was if SpiceJet owed money and was it on cash-and-carry? Technically, the answer is ‘yes’. What we have done is that we will be paying AAI on a daily basis and we pay something extra for past liability. From Rs 275 crore, the outstanding to AAI is now at Rs 150 crore.”

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