SpiceJet (SG, Delhi International) has appealed to the Indian government to grant the struggling carrier various concessions aimed at allowing it to continue operating. The call comes against the backdrop of a fast deteriorating financial situation which, on Tuesday, December 16, saw the LCC cancelling over 100 flights after it struggled to secure fuel at Hyderabad International, Delhi International, and Mumbai International airports.
"They (SpiceJet) have given their problem to us and they have said that in case they have to shut down their operation then the sufferer will be the passenger," Indian Minister of State for Civil Aviation, Mahesh Sharma, told local television channel ET Now. "They have requested certain relaxations and we will discuss it with our officers, we will discuss it with the senior minister and of course the government also about what best can be done."
Though New Delhi has ruled out any direct financial assistance, Indian authorities have granted the carrier some leeway lifting a moratorium on the sale of tickets more than 30 days in advance. On Monday, SpiceJet's Chief Operating Officer Sanjiv Kapoor, along with Sun Group CFO S L Narayanan, met Civil Aviation Minister Ashok Gajapathy Raju and Prabhat Kumar, the head of India's Directorate General for Civil Aviation (DGCA), to discuss the ban's impact on the carrier's financial outlook as well as public standing.
In addition, the state-run Airports Authority of India (AAI) has also agreed to defer the due-date for outstanding payments amounting to INR2billion (USD31.2million) after Kalanithi Maran, the chairman and managing director of Sun Group, personally undertook to guarantee the carrier's financial position. Local petroleum firms have also been asked to extend Spicejet a credit line valid until the end of the month despite owing them INR140million (USD2.19million).
Concerns over the carrier's short term viability triggered in November when auditors cast doubt about its ability to remain a going concern after it posted a INR3.1billion (USD50.3million) loss for its last quarter of trading.
With INR20billion (USD312million) in liabilities, SpiceJet is now estimated to require at least USD350million in recapitalization funding to allow it to return to profitability.
