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PM Modi concerned over teetering SpiceJet

business Updated: Dec 23, 2014 05:00 IST
HT Correspondent

Prime Minister Narendra Modi has expressed concern about the situation at no-frills carrier SpiceJet, which has been forced to cancel around 2,000 flights in December, top aviation ministry officials said on Monday.

The issue of the bleeding carrier came up during the Cabinet meeting last week, sources said. “Modi discussed the issue with aviation minister (Ashok Gajapathi) Raju,” an official said.

The aviation ministry last week sent a detailed report to the Prime Minister’s Office on the issue of SpiceJet and the steps taken by it to help the ailing airline continue operations.

A clutch of investors led by former director and SpiceJet co-founder Ajay Singh is set to pick up a significant stake in the embattled airline.

Singh met aviation secretary V Somasundaram on Monday and sought 2-3 weeks time to finalise the investment. The aviation ministry had asked the airline’s promoters and potential investors to show substantial capital of around Rs 200 crore in its account by this week to demonstrate their seriousness about the claims made to the government.

Singh, sources said, conveyed to the ministry that he was in talks with US-based PE funds and because of the Christmas holidays, the negotiations would stretch further.

Somasundaram is slated to call a meeting of all stakeholders including oil companies on the SpiceJet issue this week. Singh also submitted a new revival plan for the airline to the ministry, which included its plans to bring back leased aircraft that have been taken away by lessors, and scale up the airline’s fleet, sources said.

SpiceJet’s dues to foreign and Indian vendors, airport operators and oil companies grew from Rs 990 crore to Rs 1,230 crore in 18 days till December 10, a PTI report said.