When it comes to the Indian aviation market, one of the people who shaped the fortunes of the industry was Rakesh Gangwal, an ex-US airline honcho and a cofounder of IndiGo. He was credited with bringing IndiGo to the Airbus map in 2006 when they signed on for 100 A320s as a not-yet-launched airline. From there, IndiGo today has about 1000 A320 family aircraft outstanding to be delivered and is one of the biggest customers of Airbus. However, the IndiGo promoters had a falling out a few years ago. Consequently, Rahul Bhatia continued to stay on and elevated himself to the airline’s Managing Director. Gangwal is slowly selling his stake in the airline.
Rakesh Gangwal might buy into SpiceJet.
News emerged this afternoon that Rakesh Gangwal is in talks to buy a stake in SpiceJet, which is not in great shape financially. If true, this might be great news for SpiceJet, which needs more funds to revive operations and is losing market share. SpiceJet’s market share slid to 4.4% as of September-end from 7.3% at the end of January 2023.
The airline has been unable to pay the lessors who own and have leased out aircraft to SpiceJet, as a consequence of which, they have taken the airline to India’s bankruptcy court, NCLT. Lessors like Celestial Aviation, Willis Lease, Aircastle and Wilmington have taken the airline to court.
Rakesh Gangwal and his wife, Shobha Gangwal, own a 13.23% and 2.99% stake in IndiGo’s corporate entity InterGlobe Aviation (as of June 2023). Their family trust holds another 13.5% stake, so they own 29.72% of IndiGo between the entities. This stake was higher, but Rakesh Gangwal has exited part of his position in IndiGo over the months.
If this happens, it could come with its conditions and see Rakesh Gangwal back in the Indian aviation industry as an active player rather than just a passive bystander.
Bottomline
According to media reports, IndiGo’s cofounder, Rakesh Gangwal, is now looking to invest money in SpiceJet. If true, SpiceJet could get the cash to revive operations and start assembling its act to become a sizeable number 3 or 4 in the Indian aviation industry again.
What do you make of Gangwal being interested in SpiceJet? Too good to be true?
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