SpiceJet was forced to cancel its flights after oil marketing companies refused to refuel its planes, but the cash-strapped airline resumed operations in the evening after paying ₹3 crore in dues to them.
A spokesman said the airline will operate 75 flights by the end of Wednesday, down from the over 200 flights it normally does.
Oil companies stopped supplying fuel to the budget airline for non-payment of dues. SpiceJet’s stock fell 5.40 per cent on BSE and closed at ₹13.15 on Wednesday.
Meanwhile, a meeting between Ajay Singh, one of the original promoters of SpiceJet, and V Somasundaran, Secretary Civil Aviation, late on Wednesday gave rise to speculation about a possible investment into the airline by Singh. Singh, who met reporters later, declined to reveal his plans, but said the airline had a lot of potential.
SpiceJet has literally come back from the brink. Late last week, senior officials of the Sun Group, which owns the airline, reportedly flew to Delhi to announce that the airline was shutting down. Before they addressed the media, the officials met various stakeholders and political leaders who promised to help the airline.
As a result, the press conference was cancelled.
Senior Government officials told Business Line that some of the decisions such as not allowing the airline to take bookings beyond 30 days were turning to be counterproductive. “You stop the airline from taking bookings beyond 30 days and its revenues get hit. But if they are allowed to run there is a chance that they could come out fitter and repay their outstanding (debt),” a Government official said.
The last time an airline shut down under mounting losses was two years ago when Kingfisher, which had outstanding of around ₹6,000 crore, did so.
Package for sectorSpiceJet is also luckier as the Centre is looking to work out a package for the aviation sector.
By late Tuesday, the Aviation Ministry came up with a comprehensive package, which included a request to Indian banks to lend working capital to the airline and also asking oil companies and airports to give some grace period for clearing pending dues.
Whether this will be enough to save the airline, however, remains to be seen. Even after the special package was announced harried passengers continued to be hassled as the airline suspended all its flights for most of the day on Wednesday. Getting money to tide over the financial crisis is one thing but getting back customer confidence is altogether another.