SpiceJet asked to deposit Rs 200 cr; set to cancel 3,450 flights in Jan
Low-cost carrier SpiceJet has been asked to deposit Rs 200 crore with the Airports Authority of India (AAI) by December 31, failing which the airline could be put on cash-and-carry by the government.business Updated: Dec 30, 2014 22:50 IST
Low-cost carrier SpiceJet has been asked to deposit Rs 200 crore with the Airports Authority of India (AAI) by December 31, failing which the airline could be put on cash-and-carry by the government, a senior aviation ministry official told HT.
Cash-and-carry refers to paying for flight-related operations such as ground charges and fuel bill on a daily basis.
On December 16, the ministry had given the Kalanithi Maran-controlled airline 15 days to make payments or produce personal guarantees from its promoter to AAI. Sources said the airline had deposited a bank guarantee of around Rs 82 crore so far.
“If the payment isn’t made by Wednesday or the guarantees don’t come in, we will put the airline on cash and carry,” the official said. Sources, however, said the deadline for making payments to AAI was likely to be extended.
SpiceJet will cancel around 3,450 flights in January in line with a curtailed schedule. “Our daily operations are down from 345 flights a day to 230 flights which means, we are operating 115 lesser flights a day,” a SpiceJet official said. The airline has cancelled 1,861 flights till December 31.
Aviation minister Ashok Gajapathi Raju said SpiceJet will have to resolve its financial problems itself and the government can only help. “The government can be helpful but SpiceJet’s problem is its finances, which it will have to sort out,” he said.
A consortium of investors led by SpiceJet co-founder Ajay Singh is likely to make an investment of around Rs 1,500 crore to pick a substantial stake in the embattled airline and buy out Maran’s stake in the carrier.
Singh, sources said, is in talks with US-based private equity company Indigo Partners, private investment firm, TPG Capital, investment banks JPMorgan and Morgan Stanley, as he leads efforts to stitch together an alliance to rescue the ailing carrier.