Spicejet has told the government that its promoters are willing to infuse more capital into the struggling airline.
New Delhi:
Budget airline Spicejet, which has been battling financial troubles, has got a one-week breather from the government, to come up with a concrete funding plan to turn around the fortunes of the ailing airline. Sources say the government's move came after senior management members of the airline met the Director General of Civil Aviation (DGCA), the country's aviation regulator, where the airline promised that its promoters were willing to infuse more capital.
The Maran family, which controls Spicejet, has reportedly agreed to stand guarantee if the airline was allowed to operate their services and a line of credit is continued to be extended to it by PSU oil companies and airport operators. Usually, PSU oil companies and airport operators give 90 days' credit to settle their bills. However, PSU oil companies had threatened to put Spicejet on a cash-and-carry mode from Monday.
Even the Airports Authority of India (AAI), which is yet to get around Rs 200 crore from the airline from past dues, had announced that Spicejet will have to pay cash for services like using airport terminals, navigation charges and landing and parking charges. In other words, the airline would have had to pay cash every time it wanted to operate a flight.
Though the airline has promised fresh equity infusion, questions still remain over where it will get the money from. So far, the Marans have failed to attract any investor willing to pick up a stake in the ailing airline.
Earlier in the day, the management had sent an email to all employees, saying it is trying its best to keep the airline afloat, and is in the process of meeting senior government officials. "Meeting (between DGCA and Spicejet) will effectively determine future of our company. If all goes well, we can expect to continue operations smoothly and as planned. If for any reason, all does not go well, then expect the following. You will get a call from a senior management pilot. He will brief you in detail as to the situation and necessary further action to be taken. Please do as briefed," the email read, according to sources who spoke to NDTV.
Senior officials of the Union Civil Aviation Ministry said the government was considering its options in the matter. "With thousands of jobs at stake, fares going up every day and connectivity being affected, we are trying to help out the airline. But, ultimately they will have to help themselves if they want to stay alive," said a senior Civil Aviation Ministry official familiar with the issue.
Though the cash starved airline may have got a temporary reprieve from the government. But the big question is will it be able to manage the funds that it requires to prevent Spicejet from going the Kingfisher way.
The Maran family, which controls Spicejet, has reportedly agreed to stand guarantee if the airline was allowed to operate their services and a line of credit is continued to be extended to it by PSU oil companies and airport operators. Usually, PSU oil companies and airport operators give 90 days' credit to settle their bills. However, PSU oil companies had threatened to put Spicejet on a cash-and-carry mode from Monday.
Even the Airports Authority of India (AAI), which is yet to get around Rs 200 crore from the airline from past dues, had announced that Spicejet will have to pay cash for services like using airport terminals, navigation charges and landing and parking charges. In other words, the airline would have had to pay cash every time it wanted to operate a flight.
Though the airline has promised fresh equity infusion, questions still remain over where it will get the money from. So far, the Marans have failed to attract any investor willing to pick up a stake in the ailing airline.
Earlier in the day, the management had sent an email to all employees, saying it is trying its best to keep the airline afloat, and is in the process of meeting senior government officials. "Meeting (between DGCA and Spicejet) will effectively determine future of our company. If all goes well, we can expect to continue operations smoothly and as planned. If for any reason, all does not go well, then expect the following. You will get a call from a senior management pilot. He will brief you in detail as to the situation and necessary further action to be taken. Please do as briefed," the email read, according to sources who spoke to NDTV.
Senior officials of the Union Civil Aviation Ministry said the government was considering its options in the matter. "With thousands of jobs at stake, fares going up every day and connectivity being affected, we are trying to help out the airline. But, ultimately they will have to help themselves if they want to stay alive," said a senior Civil Aviation Ministry official familiar with the issue.
Though the cash starved airline may have got a temporary reprieve from the government. But the big question is will it be able to manage the funds that it requires to prevent Spicejet from going the Kingfisher way.
Track Latest News Live on NDTV.com and get news updates from India and around the world
