SpiceJet In Dire Straits, Seeks Govt Help

15/12/2014 6:58 PM IST | Updated 15/07/2016 8:24 AM IST
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An aircraft from low-cost Indian carrier SpiceJet taxis towards takeoff at the domestic airport in Mumbai on July 15, 2008. US-based fund WL Ross said that it will invest 80 million dollars in struggling Indian low-cost airline SpiceJet. SpiceJet shares surged 4.5 rupees, or 16.1 percent, to an intra-day high of 32.45 rupees (76 US cents) following the announcement, but later retreated to close at 28.5 rupees at the Mumbai stock exchange. The US-based investor is part of global investment manager Invesco, which manages assets for investors in the US, Europe and Asia. Airlines in India, reeling from cut-throat competition in the sector, have also been hard hit by spiralling fuel prices. India has the world's most expensive turbine fuel prices because of local taxes of up to 30 percent. AFP PHOTO/Sajjad HUSSAIN MORE IN IMAGE FORUM (Photo credit should read SAJJAD HUSSAIN/AFP/Getty Images)

New Delhi -- Suffering a total liability of about Rs2,000 crore, beleaguered no-frills carrier SpiceJet today approached the government and sought urgent financial help to run its daily operations.

Top officials of the airline met Minister of State for Civil Aviation Mahesh Sharma and made the plea for "urgent relief".

The minister said any such decision could be taken by the "highest level" in the government and said the request of SpiceJet would be put up before the Prime Minister's Office and the ministries of Finance and Petroleum.

"No assurance has been given to them," Sharma told reporters after the meeting.

The meeting came hours after the airline officials met DGCA chief Prabhat Kumar and shared an operational plan, but sources in the aviation regulator said there was "nothing new" in it.

DGCA had given the airline time till today to release pending salaries of employees and submit a schedule on how it plans to pay vendor dues of about Rs1,600 crore.

Till date, SpiceJet has gradually reduced flights across its network from 332 daily to 239 from September 1 till date, according to latest official figures. It has cancelled over 1,800 flights a month.

The airline, which had 48 aircraft -- 33 Boeing 737s and 15 Q-400 regional jets, was operating only 35 of them -- 22 B -737s and 13 Q-400s, considerably shrinking its fleet as it lost considerable amounts on a regular basis. It has a 17 percent domestic market share.

The airline has been losing money and has cancelled over 1,800 flights in a month. It has shrunk its fleet from 58 aircraft to nearly 37.

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