SpiceJet Resumes Operation, Pays Cash to Buy Jet Fuel

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    New Delhi: Troubled airline SpiceJet on Thursday resumed operations after being forced to cancel over 150 flights with oil marketing companies refusing to refuel its planes forcing the budget carrier to pay Rs 3 crore last evening to buy jet fuel.

    "So far, the operations are going as scheduled," airport sources said, as the airline flew at least five flights out of Delhi till 1000 hours to Mumbai, Jaipur, Port Blair, Kochi and Varanasi.

    SpiceJet Resumes Operation, Pays Cash to Buy Jet Fuel
    Spicejet: Quotes, News
    BSE 104.85BSE Quote3.95 (-3.77%)
    The airline came out of the brink on Thursday after all its flights were grounded for about ten hours on Wednesday before it made part payment of Rs 3 crore to oil companies enabling it to partly resume operations. Of the 243 listed flights, it claimed to have operated 75 across the country after 1600 hours on Wednesday.

    Ajay Singh, one of the original promoters of SpiceJet, met with Civil Aviation Secretary V Somasundaran fuelling speculation about the former planning to invest in the carrier once again.

    Mr Singh refused to reply to questions on whether he would invest, but said SpiceJet had a "lot of potential".

    S L Narayanan, CFO of the airline's parent company Sun Group, told PTI, "We need some breathing time ... if we get a reprieve from the banks and Mr (Kalanithi) Maran is ready to give guarantee we can restart the engine. Once the collection starts coming in, we will pay (the dues)."

    Mr Maran has already invested around Rs 820 crore in the last three years and he has invested whenever the airline has needed money, he said.

    The Civil Aviation Ministry's decision not to allow SpiceJet to take bookings beyond 30 days turned counter- productive, affecting its daily earnings. This forced the Ministry to put on hold its decision.

    It had also asked oil companies and airport operators to extend a 15-day credit facility to SpiceJet to save the airline from shutting down.

    The ministry's intervention, however, came with a rider that the beleaguered airline will commit capital infusion at the earliest.

    The airline has total liabilities of Rs 2,000 crore which include dues to the public sector oil firms and the Airports Authority of India (AAI).

    The last time an airline to stop operations under mounting losses was two years ago when Kingfisher, which had outstanding of around Rs 6,000 crore, shut down.

    PTI

    Read more about: spicejet
    Story first published: Thursday, December 18, 2014, 12:02 [IST]
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