SpiceJet has just got spicier with US billionaire Wilbur Ross pumping in Rs 3.45 billion into the low cost airline. The new investment may be seen as a fitting endorsement of India’s no-frills carriers in the long term.

The investment by Ross, who is known as the man who made fortunes by taking over struggling steel and oil companies, comes at a time when the airlne industry is facing air-pockets after a promising boom. Wilbur Ross, who is expected to take a seat on the SpiceJet board, has been quoted as saying that “the investment is a long-term validity of the low-cost airline model in India, and that fuel prices eventually will stabilise.”

Significantly, Ross’s investment is expected to allow SpiceJet maintain its budget model partly by helping it honour commitments to expand its fleet by buying new planes from Boeing. As an endorsement, the SpiceJet stock has also seen a rise. Ross is expected to will buy foreign currency convertible bonds held by Istithmar, the Dubai government’s investment agency, and Goldman Sachs. Ross is expected to release final details of the transaction in the next 10 days.

The latest development follows SpiceJet’s rejection of a buyout offer made by Kingfisher Airlines head honcho Dr Vijay Mallya. The American billionaire’s investment in SpiceJet has also spelt a relief for the airline scene in India which has been going through a bad phase. India’s aviation segment players had been seen as fighting it out to stay afloat after having been thrashed miserably by the sky-rocketing fuel bill. Incidentally, the SpiceJet news follows reports that state-run Air India is scouting for a £270 million rescue package from the Centre to offset losses.

As recently as this week, three players namely Kingfisher, Deccan Aviation and Jet Airways’ budget carrier Jet-Lite had announced a 100 percent hike in fuel surcharges because of high oil prices. It has been pointed out that the airline companies in the country had showed a combined loss of $938 million in the fiscal up to March 2008.