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Rediff.com  » Business » New owner open to SpiceJet's name change

New owner open to SpiceJet's name change

June 17, 2010 09:03 IST

SpiceJetSpiceJet's new owner, Kalanithi Maran, has kept the door open for changing the name of India's second largest low-cost carrier.

The public announcement of an open offer issued on Wednesday said "subject to the permission of the Directorate General of Civil Aviation/ Ministry of Civil Aviation, the acquirers propose to change the name and registered office of the target company (SpiceJet) upon the successful completion of the offer and acquisition of shares."

Sun Network chairman Kalanithi Maran and his company, Kal Airways Pvt Ltd, which was incorporated on May 6, are the acquirers of the airline.

KAPL is promoted by Maran and his wife Kavery.

The offer further said DGCA rules require prior permission for changes in the name and registered office. Applications for the requisite approvals will be made at the appropriate time, it said.

Despite repeated calls, officials from Sun TV Network Ltd remained unavailable for comment.

SpiceJet is currently registered in New Delhi. The carrier operates 129 flights daily to 18 destinations across the country and has a market share of 13.2 per cent, according to latest figures available on the DGCA website.

It has also gained approval to start flights to Nepal, Bangladesh and the Maldives.

The airline currently has a fleet of 21 Boeing 737-800 with winglets and Boeing 737-900ER aircraft and is likely to add at least five aircraft this financial year.

Maran had said in his post-acquisition media interview that the airline would not be renamed, as SpiceJet had a very strong brand presence in northern India.

Earlier acquisitions in the aviation industry had led to renaming of the airline. Air Deccan and Sahara Airlines, for example, were rechristened Kingfisher Red and JetLite, respectively, and have done reasonably well since.

People involved in the deal said, logically, Maran can change the brand name. Since most of his businesses are under the Sun brand, this can be a tempting option. But, they said, that may not happen immediately.

Maran, the only serious bidder for a majority stake in SpiceJet, has acquired 37.7 per cent stake in the carrier by buying out Wilbur Ross and Bhupendra Kansagara.

The acquisition took place at Rs 47.25 per share amounting to Rs 750 crore (Rs 7.5 billion).

The Sun TV chief launched an open offer of 20 per cent as per the capital market regulator's guidelines for around Rs 57 a share. He will have to shell out Rs 479 crore (Rs 4.79 billion) more for the additional stake.

Kapil Kaul, CEO-South Asia, Centre for Asia Pacific Aviation said: "I see the possibility of a brand change, but my instinct is that SpiceJet will continue for some time.

"The change will be only after the acquirers gain a firmer understanding of the business and as part of their long-term plan, since branding is serious business.

"Sun is a strong brand in the South and I think there maybe a larger international expansion out of the South, mostly to the Far East, such as Malaysia and Singapore among others.

"Also, there is a possibility that for strategic reasons the address may be shifted to Chennai. But, only a few of the top management may shift."

Sneha Kupekar in Mumbai
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