How SpiceJet is scripting a turnaround
Ajay Singh put in place a turnaround plan and, together with timely infusion of funds, ensured that SpiceJet returns to the profit path
Last Updated: Oct 19, 2015, 06:04 IST2 min
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Few stories arouse as much interest as those involving turnarounds. Stories where entrepreneurs or leaders have managed to script new business strategies to ensure that companies which have run into troubled times are brought back onto the path of sustained profitability. Very often, such turnarounds are undertaken by way of a mix of tough measures to keep costs under control and smart business strategy. Such an effort is currently playing out at low-cost carrier SpiceJet, which, not so long ago, was threatening to drop off the radar and become yet another airline to bite the dust, joining the likes of Vijay Mallya’s Kingfisher Airlines. But timely intervention by SpiceJet’s co-founder Ajay Singh—who had earlier moved away from it when the Marans of the Sun Group took charge—seems to have saved the day for the airline.![mg_83371_forbes_india_sm_280x210.jpg]( "mg_83371_forbes_india_sm_280x210.jpg")
The savvy, well-connected entrepreneur that he is, Singh put in place a quick turnaround plan, together with timely infusion of funds and some hands-on decision-making to ensure the airline gradually returns to the profit path. His efforts have also been helped by the easing of fuel prices and some innovative thinking on the operations side. The result: From a loss of over Rs 1,000 crore in FY14, and accumulated losses of Rs 2,500 crore at the end of FY15, the airline has shown modest profits for two consecutive quarters—Q4FY15 and Q1FY16. Clearly, as Singh himself admits to Assistant Editor Anshul Dhamija, it’s still a “partial turnaround” and the efforts to ensure sustained profitability will continue. However, the initial results of the measures put in place by Singh after he returned to take charge have been heartening, not just for SpiceJet but also for Indian aviation as a whole. One more airline going belly-up would have spelt disaster for the sector. The SpiceJet story, therefore, is compelling for a variety of reasons.
Another highlight of this issue is The Forbes 400, the definitive listing of the richest people in America. While Bill Gates continues to dominate the list at number one, Amazon’s Jeff Bezos and Facebook’s Mark Zuckerberg break into the top 10 for the first time. Nike’s Phil Knight, on the other hand, is back in the top 20 after a long gap of 18 years. The list apart, I would urge you to take a trip into the world of Donald Trump, the one-of-a-kind Republican presidential hopeful, as Forbes Editor Randall Lane answers the question, ‘What’s Donald Trump Really Worth?’ That is a fascinating package.
Best,
Sourav Majumdar
Editor, Forbes India
Email:sourav.majumdar@network18publishing.com
Twitter id:@TheSouravM
First Published: Oct 19, 2015, 06:04
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