SpiceJet evaluating 'substantial fleet order'

New Delhi: SpiceJet, which is evaluating a "substantial fleet order", will seek shareholders' approval for raising loans worth Rs 5,000 crore later this month.

The no-frills airline, that saw a change in ownership early this year amid turbulent business conditions, is also looking to consolidate its market position.

"The company's management is in the process of evaluating a substantial fleet order to secure the long-term capacity requirements arising out of the demand forecast," SpiceJet said in its 2014-15 annual report.

According to the report, such an order would improve the structural costs driven by long term contracts.

However, details about the proposed order were not disclosed.

Earlier this week, sources had said that SpiceJet plans to place an order for about 150 new aircraft and in this regard, the airline is in talks with various manufacturers, including Airbus and Boeing.

Currently, the airline has around 41 planes in its fleet, including 25 Boeing 737s, 14 Bombardier Q400s and two leased Airbus 320 family.

Meanwhile, the carrier would seek shareholders' nod to raise loans worth up to Rs 5,000 crore at its annual general meeting scheduled for December 28, as per the meeting notice.

According to the annual report, the demand for air travel has risen steadily and its growth stood at nearly 16 per cent in the last financial year (2014-15).

"With the new buoyancy in the markets, growth in manufacturing and services, reduced inflation, travel activity has increased generating additional travel... It is expected that the demand should grow around 20 per cent year on year for the near term fiscal," the report said.

Further, the airline said pricing of air travel is now reflective of the underlying cost structure.

"With forecast capacity growth in the industry remaining below the demand growth, the current pricing is sustainable and can be improved gradually," it noted.

The reins of SpiceJet returned to its original co-founder Ajay Singh in January this year.

Remaining profitable for the third straight quarter, SpiceJet posted a net profit of Rs 23.77 crore in the three months ended September.

The carrier had a net loss of Rs 310.45 crore in 2014 September quarter.