Spicejet: The turnaround success story after near collapse

Executive Summary

In an era where many companies which are on the brink of collapse often find it difficult to bounce
back and the go into a limbo of liquidation, there are certain other companies that beg to differ and
go the extra mile by putting in place the right strategies in place.

Spicejet being a well-known airline company too went into the same fate of nearing a collapse.
However it did bounce back and marched forward and was profitable within the next three
consecutive quarters. Hence in this assignment an attempt will be made to study the history and
operations of Spicejet, what caused the downfall, the period of agony and what were the strategies
taken for revival.

Spicejet was set up in the year 1984 under the vision of industrialist S.K. Modi with a view to
provide private low cost airlines to the mass public. In 1993 the company went on to be named as
MG express and collaborated with the German company Lufthansa. In 2004 it went on to be
acquired by Ajay Singh and then by the year 2008, it was Indias third low cost airline after
considering Indigo and AirDeccan.

However in the year 2012 the company went on to report a loss of 390 million rupees due to rising
cost prices. In 2014 the Director General of Civil Aviation issued a warning over nonpayment of
salaries and dues and thus the carrier was put on cash and carry operations. The company witnessed
its lowest during this point and it had rock bottom. The concerned authorities even barred
passengers from booking tickets into Spicejet.

However the management was of the strong conviction that nothing would stop them and still
manage to bounce back. Their main strategy revolved around controlling costs and thereby
attempting a major uplift of the company which was then sinking.

Hence such a success story is very laudable and hence stands as a shining example of excellent
strategy formation. By taking up such companies, wherein there were failure stories followed by
a strategic revival, the very essence of learning about strategies would serve the purpose by
undertaking such assignments.
Hence in this assignment the group is making an attempt to study the history of the airline, right
from its inception, to its operations, to its era if expansion covering the growth stage followed by
the decline stage and the strategic revival thanks to the strategy adopted by the promoters in this
regard.

Through such a productive case study lessons about management and leadership, folly mistakes
and the courage to accept failure and then rise back is what will be ingrained in the group. Failure
hits everyone hard and not everyone can get back up.

As Sylvester Stallone in the movie Rocky Balboa remarks Its about how hard you take the hit
and keep moving forward. We out rightly believe that the success story of Spicejet stands nothing
less than what he had to remark in his motivational dialogue.