SpiceJet’s slipping financial health and the recent round of last-minute flight cancellations are prompting travel agents to be cautious in selling tickets of the budget carrier.

Several travel agents are advising customers to refrain from flying SpiceJet until the budget airline stabilises operations and manages to find a cash-rich investor, it is reliably learned.

“We understand that the airline is going through a tough time and has not been able to maintain integrity of schedules. Hence, we are dissuading customers from making fresh bookings before more clarity emerges on SpiceJet’s future roadmap,” said Manoj Shah, President, Tour Operators & Travel Agents Association (TAG) of Gujarat and proprietor of Krishna World Travels.

SpiceJet, which recently reported its fifth consecutive quarter of losses, has been returning some of its Boeing 737 aircraft, as a result of which its fleet has shrunk to 22 from 35 in summer. This has resulted in flight reductions on several routes.

“In certain sectors, eleventh hour cancellations are still happening. Hence, we are appraising passengers of the ground situation and advising them to go in for other flight options for the time being,” said Reji Philip of Mumbai-based Cosmos Agencies.

In an email response to a Business Line questionnaire, SpiceJet Chief Operating Officer Sanjiv Kapoor said: “We have seen no evidence of what is claimed. We are in touch with all our major partners.”

In the last several months, SpiceJet had flooded the market with lucrative advance fares, a move which helped flyers get bargain deals.

Anuj Pathak, proprietor of Ahmedabad-based Radiant Holidays, said: “We had sold four tickets of SpiceJet to a family on Ahmedabad-Mumbai sector for Rs 10,000. When they reached the airport, they were told that the flight is cancelled. Finally, the family had to fork out Rs 30,000 to fly on another carrier,” Pathak added.

There is also a lingering fear in the trade that the no-frills airline may go the Kingfisher Airlines way. The Vijay Mallya-owned Kingfisher was grounded in 2012 under the weight of heavy debt and accumulated losses.

SpiceJet, which is controlled by billionaire Kalanithi Maran's Sun Group, had reported a loss of Rs. 310.4 crore in the second quarter ended September 30, 2014. The carrier has been scouting for an investor to recapitalise the airline. It needs at least Rs 1,200 crore to remain in the skies, according to a recent CAPA report.

“Many travel agents are yet to get refunds for tickets from Kingfisher. Now, even refunds from SpiceJet are getting delayed and hence the scepticism in suggesting SpiceJet to clients,” said Pathak.

Starting today, Airports Authority of India has put SpiceJet's operations on cash and carry mode. An airline is put on cash and carry mode when it is unable to clear its dues in the time specified or when its dues mount beyond acceptable limit. Last week, ace investor Rakesh Jhunjhunwala picked up 1.4 per cent stake in Spicejet.

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