SpiceJet
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Origin
SpiceJet has a history of fight for survival
Saurabh Sinha December 16, 2014
The airline traces its lineage to a JV formed by the S K Modi Group and Lufthansa back in 1990s. Called ModiLuft, the full service airline was launched in 1993 around the same time when others like Jet, Dama nia, EastWest and Sahara Airlines took to the skies in the post-deregulation era. A dispute between the Modis and the German carrier saw the airline getting grounded around 1998.
That was the airline's first crisis in what now turns to be an unending quest for pro moters and investors. In 2000, UK-based NRI Bhulo Kansagra bought into the airline. “They got Modiluft's lapsed licence revived and brought in a plane to start a full service airline called Royal Airlines,” said a person long associated with SpiceJet. Royal could not take off due to lack of investment.
Interestingly, around this time Kansagra and InterGlobe Group (holding company of IndiGo) were reportedly planning to launch the airline together.
In 2004, business man Ajay Singh invested in the airline, which led to the formation of SpiceJet that began flying in 2005. InterGlobe also launched its airline IndiGo. SpiceJet was always looking for a stable promoter like Jet's Naresh Goyal; IndiGo's Rahul Bhatia and GoAir's Wadia Group. This hunt saw global distress investor Wilbur Ross putting in some money. In 2010, Kansagra and Ross sold stakes to Sun Group chief Kalanithi Maran. A year layer, Ajay Singh also exited.
SpiceJet had a mix fleet of Boeing 737s and Bombardier Q400. Then they spread out too thin in terms of network and finally their constant fire sales cost them dearly ,“ said the person closely associated with SpiceJet.
In December, 2014, history repeated itself with a frantic search for another investor or promoter.
