Mumbai: After getting Air Deccan in his kitty, UB Group's Vijay Mallya is now eyeing yet another low-cost carrier, SpiceJet Ltd. SpiceJet is India's second-biggest low-fare carrier and is backed by a Dubai investment fund and a group of investment banks, including Goldman Sachs and HSBC.
The airline is reportedly in talks with Jet Airways for transfer of the stakes held by Royal Holding Services Ltd and Dubai-based Istithmar.
Royal Holding Services owns 12.91 per cent of SpiceJet while Istitmar holds 13.42 per cent. SpiceJet, however, denied there was any negotiation to sell any stake.
But on Friday, New York Times revealed takeover talks between Mallya-owned Kingfisher Airline and SpiceJet. According to a Bloomberg News report, SpiceJet has denied any such talks. "It's not true," Bloomberg quoted SpiceJet Chairman Siddhanta Sharma as saying.
However, within hours Vijay Mallya himself went on record, saying that he was indeed 'interested' in buying a stake in the rival airline. "I have not initiated any talks as yet. But if they want maximum shareholder value, they will look at me," he told a TV channel.
Mallya, it appears, is on an overdrive in an effort to consolidate the airline business and increase the advantages of scale as he aims to take on Jet Airways in the skies. A stake in the SpiceJet can give him an unbeatable lead in the budget travellers space, which has witnessed the fastest growth in terms of volume in the past three-four years.
SpiceJet, which was started in 2005 and now a listed company, has a fleet of 13 planes. The company plans to acquire a fleet of 26 aircraft by 2008 start oversees operations in the next three years. At present, SpiceJet flies to 14 destinations within India.
The company reported an operating loss of Rs 19 crore in 2006-07, but registered a robust growth of 121 per cent in its total revenue. Its total revenue went up from Rs 339 crore in the 10-month period of the previous fiscal to Rs 748 crore in 2006-07.
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