SpiceXpress to be hived off from SpiceJet in Aug
It will allow the company to raise funds independent of the budget carrier and rapidly grow
New Delhi: Banks and shareholders have given their approval to hive off cargo and logistics company SpiceXpress from SpiceJet airline and the bifurcation will be done by the first week of August, the carrier's CMD Ajay Singh has said.
SpiceJet had on August 17 last year announced it was transferring its cargo and logistics services on a slump sale basis to its subsidiary SpiceXpress as it will allow the company to raise funds independent of the budget carrier and rapidly grow. SpiceJet is under the regulatory scanner right now.
Just five days back, the airline was issued a show-cause notice by the Directorate General of Civil Aviation (DGCA) after its aircraft were hit by at least eight incidents of technical malfunction since June 19. The DGCA - while stating that the budget carrier has "failed" to establish safe, efficient and reliable air services - gave it three weeks' time to respond to the notice.
The airline has been making losses for the last four years. It incurred net losses of Rs 316 crore, Rs 934 crore and Rs 998 crore in 2018-19, 2019-20 and 2020-21, respectively. In April-December period of 2021, the airline posted a net loss of Rs 1,248 crore. However, the revenue from SpiceXpress has been increasing. In October to December period of 2021, SpiceXpress saw its revenue jump 17 per cent on a quarter-on-quarter basis to Rs 584 crore.
