The head of Indian airlines thrives in pandemic by pivoting towards healthcare

Indian airline mogul Ajay Singh had little experience in health care, but last November, as the country was being attacked by the coronavirus, he suddenly branched out into Covid-19 tests and subsequent genomic sequencing.

Known for his close connections to Indian Prime Minister Narendra Modi – he is credited with coining the 2014 election slogan “This time, Modi’s government” – Singh launched SpiceHealth, promising that the tests will be cheaper, faster and available.

Within a few months, the group had expanded its reach nationwide, even providing evidence in April of some of the millions of pilgrims who joined the annual Kumbh Mela, the country’s largest religious gathering that it was later seen as a dissemination event.

Singh’s quick pivot from the loss-making airlines sector to healthcare underscores how some of India’s biggest tycoons have managed to thrive, even during the pandemic.

India is one of the countries hardest hit by Covid-19, with more than 28 million cases and 335,000 dead, many of them in its catastrophic second wave this year.

Even before the latest outbreak, SpiceJet, in which Singh has a 60% stake, withdrew last year from a national blockade. The airline has reported losses in the last four quarters and has postponed the salaries of some employees for weeks.

In February, its auditors Walker Chandiok & Co. said there was “material uncertainty” about SpiceJet’s ability to continue as an ongoing company. Its losses would have been even greater if it had not included the expected compensation from Boeing for the landing of the 737 Max aircraft.

“We can’t understand how they stay alive,” said an executive from a rival airline.

Jitender Bhargava, a former chief executive of Air India, praised Singh for his management of SpiceJet, rescued him seven years ago when he was nearly bankrupt and quickly moved forward to take the plane of rival Jet Airways after it collapsed in 2019.

“It has done well, but when it comes to finances, few airlines have cash reserves. How long can it stay with the second wave we have had?” Bhargava said.

But executives and industry analysts say Singh is an opportunist who will likely go through the turmoil.

“Indian aviation is drowning, but Ajay will survive,” said Neelam Mathews, an aviation analyst in New Delhi.

Tushar Srivastava, head of communications for SpiceJet and SpiceHealth, said “the government did not seek or offer favors” to the group’s companies.

SpiceJet, under Singh’s control and management, settled all debts needed to reactivate the airline in 2014 and there was no financial assistance or waivers provided by the government.

335,000

The death toll from Covid-19 in India

Singh does not come from one of the established business families in India, such as the Tata, whose group spans sectors from steel to software, or the Ambanis, the dynasty behind Reliance Industries, which dominates petrochemicals. and retail.

Observers regard Singh, who pursued his master’s degrees in business administration at Cornell University, as a technocrat he has achieved straddling the worlds of business and politics.

“A person who can talk to both sides of the aisle, the politician and the money, is a rare animal,” said Rohit Chandra, an assistant professor of public policy at the Indian Institute of Technology in Delhi.

Singh was a close aide to Pramod Mahajan, the former telecommunications minister and fundraiser for ruling party leader Bharatiya Janata, who was assassinated by his brother in 2006.

It is so close to the ruling party that BJP leaders often show up at Singh events. Modi inaugurated the launch of SpiceJet’s seaplane service in October. A month later, Amit Shah, India’s interior minister and one of Modi’s closest lieutenants, appeared at the opening of SpiceHealth’s first mobile testing lab, a public-private partnership with the top research body. country clinic.

Whatever their connections, Singh’s moment in the shift to healthcare has proved fortuitous, as before this year’s outbreak it halted air travel for the second time.

Led by his 24-year-old daughter Avani Singh, SpiceHealth, an independent SpiceJet company, operates 15 mobile labs nationwide with a daily capacity of 3,000 daily tests. SpiceHealth has set up a genomic sequencing facility at Delhi International Airport and Avani has talked about moving to the acquisition and distribution of vaccines.

SpiceHealth was launched with Singh’s personal money. The company started with rapid testing and branched out into other products, including sales of “SpiceOxy,” a ventilation device.

The Spice group of companies transported 34 million Covid-19 vaccines nationwide between January and April. During the second wave, they moved thousands of oxygen concentrators from Beijing, Nanjing, Wuhan and Hong Kong to India to alleviate gas shortages.

Singh, dissatisfied with his health raid and seemingly baffled by SpiceJet’s problems, has expressed his willingness to bolster his commitment to India’s battered airline industry.

In March, it was shortlisted for Air India, the state monolith that New Delhi has been trying to privatize for years. If successful, a buyer will be announced later this year, and Singh will have to take on an impressive $ 3.3 billion in debt.

“You have to give it to Ajay Singh, which cannot be denied, is that he is a guy who takes advantage of opportunities,” Bhargava said.