Creditor banks have indicated they will issue no-objection certificates and allow SpiceJet to transfer all of its cargo and logistics operations to SpiceXpress and establish the cargo business as a separate entity, according to Ch-Aviation.
In August, SpiceJet foreshadowed the move, saying it would allow the cargo carrier to grow independently of the struggling parent airline.
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 etc. to SpiceXpress.
SpiceJet said all related assets and liabilities, including, know-how, trademark, licenses, franchises, customer contracts and distribution network of cargo and logistics business would be transferred to SpiceXpress.
SpiceXpress recently posted revenues of INR 20.6 billion (USD252.8 million) in the three months to September 30, 2022, and a net profit of INR 2.12 billion (USD26 million) from transporting 27,675 tonnes of cargo. In contrast, SpiceJet reported a multi-billion quarterly net loss.
In addition to utilizing belly hold space in its fleet of 78 passenger aircraft (only 39 are active), SpiceJet also operates a fleet of three B737-700(BDSF)s and two (presently inactive) B737-800(BCF)s under the SpiceXpress brand.
Meanwhile, SpiceJet, which has spent much of 2022 fending off insolvency claims from disgruntled creditors and received USD122 million in emergency government funding as recently as October, is on the hunt for further capital.
Last week, ch-aviation reported that the airline’s board had approved the raising of an unspecified amount of fresh capital through the issue of eligible securities to qualified institutional buyers. ch-aviation has contacted SpiceJet for further details on this and their plans for SpiceXpress.
(With Inputs from ch-aviation)