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SpiceJet shares plunged as much as 17 per cent on Tuesday as the cash-strapped airline raced against time to convince the government to help it remain in the air.
SpiceJet executives were set to meet government officials for another round of talks after a deadline set by regulators for the budget carrier to set out a plan for paying its dues to airline authorities and fuel suppliers expired on Sunday.
SpiceJet Chief Operating Officer Sanjiv Kapoor said on Monday the airline had not yet submitted a financial plan to the regulators. A spokesman for the airline said he could not comment on the talks on Tuesday.
The pressure on the embattled airline, which has been making losses since last year, to find the fresh capital it says it needs has increased this month.
"It is a typical squeeze of funds which will threaten working capital for Spicejet," said Deven Choksey, managing director of brokerage K.R. Choksey Securities.
"Given the experience with Kingfisher, probably efforts would be made by government and stakeholders to make sure Spicejet doesn't go the Kingfisher way," he said.
Choksey was referring to Kingfisher Airlines, which has not flown for more than two years after racking up $1.4 billion of debt from a consortium of banks, mostly state-owned.
The Directorate General of Civil Aviation this month banned SpiceJet from taking advanced bookings for more than 30 days, forcing it to pay millions in customer refunds.
The airline, majority-owned by billionaire Kalanithi Maran's Sun Group, has also cut the size of its fleet by a third since September and cancelled more than 70 flights a day for the rest of this year.
Airlines in India are largely loss-making, as they struggle to raise fares above the cost of operating in a highly competitive market.
SpiceJet says it owes money to suppliers but the amount is less than the Rs 1,600 crore ($250 million) reported in local media.
Aviation consultancy CAPA estimates SpiceJet needs at least $300 million to $350 million of investment if it is to be able to recover, up from $250 million in March.
SpiceJet shares were down 9.50 per cent at 1 p.m., and have lost more than a third of their value since December 1.
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