Ajay Singh, MD and Chairman of SpiceJet, said the airline is on track to restructure its balance sheet despite miniscule delays. The hived-off cargo business will generate its funds for its own growth, and announcements are expected soon.
On April 1, SpiceJet completed the hive-off of its cargo and logistics division, ‘SpiceXpress’, into a separate entity, SpiceXpress and Logistics Pvt Ltd. SpiceJet had sold the cargo business for ₹2,555.77 crore.
“The slump sale is going to be credited and counted in the January to March quarter because it is effective March 31, 2023. After the hiving-off, the company will now raise funds on its own, and we will be making announcements on it soon,” said Singh on the sidelines of an Assocham press conference.
The no-frills carrier had been looking at hiving-off the cargo business for at least two years now. On this, Singh said: “While processes have been delayed, we are on track with our hive-off of the cargo unit, there will be a slump sale, regional connectivity, sea plane is falling into place is all track.”
Singh, who recently took over as Assocham President, said the Indian aviation and hospitality industry are poised for better growth this fiscal despite looming fears of inflation. However, issues pertaining to VAT on ATF in the aviation industry, and multi-window clearance in the hospitality industry continue to be a dampener to the growth.
Addressing his maiden press conference after taking over as Assocham President, Singh dealt with several issues confronting the Indian industry, including the overall economic outlook, inflationary pressures and several unfolding opportunities for the young entrepreneurs as the country leverages the technology-led economic expansion with large job potential.
“The Indian aviation, hospitality and travel industries are still grappling with the aftermath of covid but they are bouncing back rapidly,” he said. When asked if the industry is likely to continue its growth trajectory, despite inflationary pressures, he said that “At least the hotel industry is likely to continue the same trajectory. If growth tapers off internationally, we will have to see how it impacts us, but at the moment it is not easing off,” Singh said.
However, he said that there were a few issues that the industry has been staring at which required immediate address was the VAT on ATF. “The cost of ATF has always been a matter of concern, and we have requested that it should be brought under GST. Of course, we have been requesting the reduction on the VAT on ATF. We continue to do so.”
Speaking about the issues faced by the hospitality industry, Singh said that the time taken for a hotel to be built in India needs to come down drastically. Industry data show that on an average it takes anywhere between three to five years to get a hotel operational.
He said the multi-window clearances, and multiple permissions make it extremely difficult for the hospitality industry to operationalise a hotel at the earliest. “The time taken should come down to two years,” he said adding that “clearances should also get quicker.”