SpiceJet MD calls for aviation tax reform, eyes expansion

SpiceJet has around 200 Boeing 737 MAX on order. Representation Pic

During the discussion at the Centre for Aviation (CAPA), India forum, Ajay Singh, managing director, SpiceJet discussed an important point. He said that the government cannot expect lower ticket prices while taxing the aviation sector as a rich man's product. He stressed the need for aviation hubs in India.

Lower taxation

"The domestic aviation market is now very competitive. Instead of market share, airlines are striving for profitability. Yields in the Indian market are currently at the highest and this trend will continue in the next financial year," said Ajay Singh.

Not just Ajay Singh, but Director General of IATA, Willie Walsh, is also concerned about the higher taxes in India. In the IATA AGM 2024, he said, "Higher taxes will lead to airlines withdrawing their operations from the Indian market. In October 2023, the GST Intelligence Office sent tax notices to various foreign carriers, accusing them of tax evasion."

Ajay Singh, MD, SpiceJet; (right) Willie Walsh, director general, IATA

Singh hopes that the next government will be less bureaucratic. On Tuesday, the Lok Sabha election results were announced, in which the BJP-led NDA Alliance won 291 seats, while the Congress-led INDIA Alliance won 234 seats. Industry sources aware of the matter disclosed, "Ajay Singh is considered a close aide to the BJP government. In 2019, he was the one behind the carving of the slogan of BJP- 'Abki Baar, Modi Sarkaar'."

Singh added, "It is difficult to kill SpiceJet, as the airline is set to grow again. Since its inception, the airline's journey has been like a roller coaster ride. It has around 200 Boeing 737 MAX on order, but it has not taken delivery of a single jet since the pandemic. Some of its planes are grounded because of the non-availability of spare parts, it is mitigating the demand by wet-leasing some aircraft from foreign carriers. For Hajj operations, it has wet-leased two Airbus A340s from Legend Airlines."

Raising more money

Singh also highlighted that the airline is looking to raise more money in the next few months, "The airline is looking to raise more money. Within the next three months, it will be raising R2,000 crore." Singh has been in discussions with various private credit funds for investment. "This money will be used to lease more aircraft. In the next six months, the airline is looking to clean its balance sheets," he added.