SpiceJet, a leading airline in India, has received a significant boost in its credit rating. Acuité Ratings & Research has upgraded the airline’s long-term credit rating to BB (Stable) from BB- (Stable), while maintaining its short-term rating at A4+. This upgrade comes just a month after the airline’s previous rating upgrade, indicating a notable improvement in its financial health and liquidity.
The reasons behind this upgrade are multifaceted. SpiceJet has shared detailed plans for its operational revival, which include adding new leased aircraft, increasing its daily flights to 280, and reintroducing grounded planes. The airline has also resolved its dispute with Carlyle Aviation Partners, a major lessor, which is expected to enhance cash flow for maintenance and reduce lease debt. This settlement will also enable SpiceJet to convert part of its lease debt into company ownership, further strengthening its financial position.
Acuité attributes the rating upgrade to SpiceJet’s robust operational plans, improved liquidity, and agreements with key lessors. The airline’s leadership, particularly Chairman and Managing Director Ajay Singh, has been praised for its experience and success in turning the airline around in the past. With over 15 years of experience in the aviation sector, Singh’s expertise has been instrumental in driving SpiceJet’s growth.
Debojo Maharshi, Chief Business Officer of SpiceJet, expressed confidence in the airline’s future, stating that the consecutive upgrades in credit ratings demonstrate its efforts to build a stronger financial base and prepare for long-term growth. With a growing fleet, restructured agreements, and a focus on expansion and profitability, SpiceJet is poised to improve its operations and customer experience.
The rating agency believes that SpiceJet’s expanding fleet and diverse revenue sources will support its earnings in the near future. This upgrade is a testament to the airline’s commitment to strengthening its financial foundation and driving growth. As SpiceJet continues to expand its operations and improve its services, it is likely to maintain its position as a leading player in the Indian aviation industry. Overall, the credit rating upgrade is a positive development for SpiceJet, indicating a significant improvement in its financial health and prospects for future growth.