SpiceJet told the ministry that under special circumstances, this could be waived if the ministry concerned wrote to the regulator.

The aviation ministry took the opinion of a former Supreme Court judge, who said there was nothing wrong in making such a recommendation to the regulator as the airline was on the verge of being grounded.

And so, Singh took over the airline.

Things improved rapidly.

Jet fuel price that hovered at Rs 40 a litre in 2010 when the Marans bought SpiceJet, and rose to as much as Rs 77 a litre in 2013 and about Rs 70 a litre in 2014, fell to Rs 46 a litre in February 2015, according data from IndianOil website, and then further to Rs 35 a litre on February 2016. It’s now hovering at Rs 48 a litre.

Fuel makes up a third of the cost of an airline in India.

Data from SpiceJet’s balance sheet shows this was one of the biggest reasons for the airline’s turnaround.

SpiceJet paid Rs 2,410 crore to oil firms in 2014-15 but only Rs 1,392 crore in 2015-16, a drop of 42 per cent.

This was a saving of Rs 1,018 crore. The airline clocked a profit Rs 407 crore in 2015-16 and has been profitable since. Rival Jet Airways too posted its first ever profit in 2015-16, after eight years.

“SpiceJet also controlled costs and improved many things like including on-time performance. The one thing they used to do back then was dirt cheap fare sales which was dragging them down. That has gone to a large extent and has helped too,” said Pandurangi of Deloitte.

Earlier this year, the airline ordered 100 fuel-efficient Boeing Max aircraft, adding to a previous order of 55 planes which will be delivered over the next decade and bring down its costs by another 5 to 10 per cent. It also has options to buy 50 more planes taking its order book to 205.

The order laid down the long-term plan for the airline — one that it never had before because of frequent changes in ownership.

Boeing, which had also helped the airline during its crisis returning about $30 million paid as booking amount for planes, now sees SpiceJet as a strong customer.

“They are a strong player now,” said Dinesh Keskar, senior vice-president (Asia-Pacific and India) of Boeing Commercial Airplanes.

SpiceJet will gradually return the $30 million, as it is now making profits. The airline has also pared its debt and launched a new advertising campaign to restore consumer confidence.

“We needed to change the image. We had to change the mindset within the company,” said Singh.

Singh, who runs the airline like a CEO himself, allowed some senior staff in the Maran era to leave but retained old-time loyalists who helped him launch the airline in early 2005.

He also kept the culture simple. Instead of moving decisions all day on emails, Singh keeps his doors open all the time, allowing senior officials to discuss and take decisions on the go, said a SpiceJet official who did not want to be named.

Singh said the airline needs to do more — low oil prices will not last forever. “We have to prepare for a time where oil is higher than today. That’s what I am trying to do. The broad direction will be this — increase revenues, decrease costs,” he said.

The airline also knows what it is up against.

While they started as equals, IndiGo, India’s largest passenger airline run by InterGlobe Enterprises Ltd, now has 136 aircraft and is growing by about two planes a month, adding aircraft from its 400-plane order. It also controls 40 per cent of the domestic market.

And in a departure from its strategy of having just one kind of aircraft, IndiGo has decided to order 50 ATR turboprop planes that will ply on routes that bring high yields to SpiceJet.

SpiceJet has been trying to differentiate its product. There is a new uniform for the crew. It has also tied up with Lufthansa Systems to provide inflight entertainment to passengers on their mobiles and laptops in new planes. The airline may also offer Wi-Fi for a fee next year and experiment with international low-cost flights. It is also opening SpiceJet retail stores to experiment with ancillary revenues.

A legacy issue that prevents the airline from raising money through equity and potentially hurt investor sentiments is now closer to being resolved.

The transfer of control of the airline from the Marans to Singh — the terms of the deal were not made public and that came up for criticism; the details only emerged from the court filings — became controversial.

The matter has gone into arbitration. The Delhi high court on 3 July directed SpiceJet to set aside Rs 250 crore as cash and another Rs 329 crore as bank guarantee on or before 31 August against this even as the matter is resolved.

The airline currently has about Rs 350 crore cash on its books. Singh’s nearly 60 per cent stake is worth Rs 4,000 crore.

A former aviation secretary who did not want to be named said the ministry had planned to frame a policy for airlines going bankrupt so the same yardstick is there for everyone in the future. That policy should have been crystallised by now.

“In the last one-and-a-half years alone three small airlines have shut shop if you notice,” he said. “There should be one rule for all. ” His reference is to Air Costa, Air Carnival, and Air Pegasus that have all been grounded. And his reference is also to the perception that Singh is close to the current government.

Singh studied at the Indian Institute of Technology Delhi and Cornell University in the US, and went on to become an aide to the late Pramod Mahajan, one of the most high-profile leaders of the Bharatiya Janata Party (BJP), till his untimely death in 2006.

Chandigarh-based Checker, who is now working with his father in the family business, said Singh’s background led him to gamble on SpiceJet’s shares. “I just knew he founded the airline, he was a smart guy and that he was close to the BJP,” he said. “I was sure SpiceJet wouldn’t shut down.”

The Maran family put in Rs 179 crore into SpiceJet as debt in late 2014. They were to be issued convertible warrants against this. Subsequent to the takeover of the airline company that happened in early 2015, SpiceJet agreed to issue warrants against this and also against Rs 500 crore that the Marans paid at the time to settle some liabilities.

The share purchase agreement between the two says the Marans would invest Rs 679 crore and be issued these warrants and/or redeemable preference shares.

According to details that have emerged in the course of the arbitration, the Marans put in around Rs 579 crore, but were issued neither the warrants nor the shares.

Although SpiceJet wanted to issue the warrants, the stock market regulator didn’t sign off on it because it was not paid.

The Delhi High Court has, pending arbitration, asked SpiceJet to deposit Rs 329 crore bank guarantee and Rs 250 crore as cash in the high court as a security.

The matter in arbitration is likely to be decided in the next three months and the amount ordered by the arbitration tribunal will be paid by SpiceJet to the Marans, said a SpiceJet official who did not want to be named.

While the Marans are said to be keen on the warrants, it is unlikely that Ajay Singh will want to issue them and make them a shareholder in SpiceJet again.

The article was originally published in Mint and has been republished here with permission.