SpiceJet operations grounded as oil companies stop fuel supply -economictimes.indiatimes.com

An executive of the parent Sun Group said there would be no alternative but to "mercy kill the airline if the current situation continues".


NEW DELHI: Flight operations of cash-strapped SpiceJet were grounded today due to non-supply of jet fuel by oil marketing companies.

"Not even a single flight has taken off till this morning due to fuel supply issue with the oil companies," sources told .

The state-run oil marketing firms have not yet taken a decision on the resumption of jet fuel supply to SpiceJet on a two-weeks credit facility, they said.

When contacted, an airline spokesperson said operations were likely to be "normal" shortly.

Coming out to the rescue of the beleaguered carrier, the Civil Aviation Ministry had yesterday said it will request the oil companies and the airport operators to extend a 15-day credit facility to SpiceJet in a bid to save the airline from shutting down.

The Aviation Ministry had said it may request Indian banks/financial institutions to extended loans of upto Rs 600 crore to the airline as part of measures to keep the carrier functional.

Besides, it will also request the Finance Ministry to permit external commercial borrowing (ECB) for working capital as special dispensation.

The measures, however, comes with a rider that the beleaguered airline will commit capital infusion at the earliest.

The steps came after SpiceJet's Chief Operating Officer Sanjiv Kapoor, along with Sun Group CFO S L Narayanan, met the Civil Aviation Minister and DGCA Prabhat Kumar on Monday and sought the government's help to overcome the crisis.

"Indian banks may be requested to give some working capital loan based on the assurances of the promoter. Banks or financial institutions to lend up to Rs 600 crore backed by a personal guarantee of the Chairman, SpiceJet," a ministry release had said.

At the same time, the airline, with total liabilities standing at Rs 2,000 crore, including dues to the public sector oil firms and the Airports Authority of India (AAI), may get credit facility for up to 15 days from the oil firms and AAI, the government had said.
Later, the sources said the grounding of SpiceJet flights could be lifted later today after the oil companies decide on resuming fuel supplies following a directive from the government yesterday. 

Aiming at avoiding closure of another airline after Vijay Mallya's Kingfisher, the Civil Aviation Ministry had taken a series of decisions aimed at providing temporary succour to the beleaguered carrier, including asking oil companies and the Airports Authority of India to give SpiceJet 15 more days to pay its dues, at least in part. 

SpiceJet owes the state-run airports body Rs 173.09 crore, as on December ten. 

The Ministry has provided the concessions to SpiceJet with a rider that its promoters led by media baron Kalanithi Maran gives a "personal commitment" to infuse more equity into the low-cost airline soon.
Share on Google Plus

About Wikipedia

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.
    Blogger Comment
    Facebook Comment

0 comments:

Post a Comment

Contact Form

Name

Email *

Message *