No plans to sell equity to Hindujas: Spicejet

Maintaining that it was not in talks with anyone, including the Hindujas to sell its equity, budget carrier Spicejet on Monday said it was raising finances through convertible bonds to fund its fleet acquisition.

"There has been no talk with anybody including the Hindujas. Maybe they (Hindujas) are expressing their personal interest. But nobody has approached us and the company has no information," Siddhanta Sharma, Spicejet chairman said in reply to questions.

He also maintained that there were "no plans for an initial public offer (IPO) at this stage.

"We have issued foreign currency convertible bonds (FCCBs) in June this year for $90 million. This is to fund fleet acquisition. We plan to close it by September," he said.

Asked whether they were contemplating any upward revision in the airline's "low fares" in view of increasing jet fuel prices, Sharma maintained that fuel costs had been rising enormously and said: "We will pass on a fraction of the burden to customers when it becomes unbearable."

"If the fuel price is hiked by five per cent, we may raise fares only by two per cent and that will amount to a rise of around Rs 60 as our average ticket price is Rs 3,000," the low-fare carrier's chief said.

On the fleet plans, he said Spicejet, which has three Boeing 737-800s now, would get two more on lease in November and its first purchased aircraft in January next year.

Sharma said Spicejet would start getting "almost one aircraft every month between August 2006 and December 2007."

"We expect to have a fleet of nine to ten planes in the first 12 months of our operations and 20 to 30 in the next three years", the airline chairman said.

With the two leased aircraft joining in November, the airline would launch daily services from Delhi to Kolkata and Chennai, he said, adding: "We are looking at under-served and potential sectors like major train markets where travel time is beyond eight hours".

It also planned to start flights to Hyderabad, Patna and Srinagar in the near future.

The airline, floated three months ago, claimed a "very high" average passenger load factor of over 84 per cent. In May it was 96 per cent, 93 in June, 86 in July and over 82 in August so far.

On its financial performance in the first quarter, he said the airline was recovering the variable operational costs, which included lease charges, fuel costs, landing and navigation charges.

"However, there is a deficit on the fixed overheads like in administration and finance", he said, adding that Spicejet planned to seek advertisements inside the aircraft to raise resources.