Reportedly due to increasing differences with promoter Kalanidhi Maran, SpiceJet chief executive Niel Mills has put in his papers, 18 months before his contractual tenure. 

 

Mills is the third CEO of the Chennai-based carrier in the past five years. His resignation comes within a few months of airline’s chief commercial officer Harish Moideen Kutty resigned. The resignation comes amidst reports that airline is planning to raise funds, including through strategic investors to cope with increased competition.  Mills could not be reached for comments.

 

However, when contacted a spokesperson of the second largest low-cost airline refused to confirm or deny the development saying they do not respond to market speculation. The industry was abuzz with rumors that the Marans were upset with the poor earnings last fiscal when it had reported a loss of Rs 191 crore, which they blamed on the cheap ticket scheme Mills has offered in January.

 

Mills is the second major exit from SpiceJet in the past few months after its chief commercial officer Harish Moideen Kutty resigned, a little over a year after he joined the budget airline. Kutty has since then joined RAK Airways. Kutty’s resignation came days after the airline reported a more-than-expected loss of Rs 191 crore in FY14. He was the second chief commercial officer to quit SpiceJet in 18 months.

 

Mills joined Spicejet in 2010 and was hired by Maran from FlyDubai, after the media baron bought the airline from NRI promoter Bhulo Kansagra in the same year. The Marans have pumped Rs 350 crore into airline in the last three years, while the airline has lost Rs 796 crore.

 

SpiceJet, started in 2005, has a market share of about 20 per cent as opposed to IndiGo’s 30 per cent, and operates with 56 planes. "We have recommended a regulatory authority to look into the problem (impact of FDI in multi-brand retail on MSMEs)," Tiruchi Siva, DMK leader and chairman of the parliamentary standing committee on industry, told reporters.

 

Reacting to the suggestion to set up a regulatory authority for retail, commerce and industry minister Anand Sharma said these are executive functions. "These are the executive functions. These are not functions to be dealt by the standing committees," Sharma told reporters.

 

 According to Siva, if multi-brand retail chains are not regulated well, it will impact medium, small and micro enterprises (MSMEs), farmers and domestic mandis. "Once…mandis are eliminated, the big foreign retail giants will manipulate prices and our farmers will be forced to sell their products at low prices dictated by them (foreign retailers), the panel said in a report.

 

 "Our own squeezed out retailers and all those associated with the market and retail trade would lose their livelihood and become jobless. It will add to our already existing social and economic woes, which generate so much unrest and violence."

 

Siva was of the view that multi-brand chains should be regulated so that customers are not fleeced and farmers are not under-paid for their produce. Taking serious note of the implementation of sourcing norms, the committee suggested the 30 percent procurement requirement should be applicable item-wise.

 

While allowing 51 percent FDI in multi-brand retailing, the government made it mandatory for at least 30 percent of the value of manufactured or processed products to be sourced from small industries. The panel also suggested the MSME ministry should commission a survey to assess the benefit and losses of previous FDI policies on the MSME sector to ascertain if they have created any back-end infrastructure, imparted skills to domestic manpower or upgraded managerial skills, as is being envisaged in the current FDI policy.