SpiceJet Avoids Turbulence as Government Gives 10-Day Moratorium

Published: 01st January 2015 06:00 AM  |   Last Updated: 01st January 2015 08:52 AM   |  A+A-

CHENNAI: The storm clouds had all but hidden any ray of hope that SpiceJet may have had of not being put on cash-and-carry mode by Airports Authority of India (AAI).

Just as the officer in charge of inking the order was about to make things official, a singular diktat from the Ministry of Civil Aviation tied his hands. “At close of day, the officer was about to sign the circular to all airport directors to levy flight-wise charges on SpiceJet, but a call came from the ministry to give them 10 more days time to clear the dues,” said a high-ranking AAI official, privy to the goings on at AAI HQ in the capital. So, the order has been junked for now, but may well be resurrected within the next two weeks.

Possibly the best New Year present that the airline could have received, given their recent problems, they will have to pay at least a “major portion” of the `200 crore that they owe AAI by January 10.

Two weeks ago, the ministry had stopped airports across the country from pulling the rug out from under SpiceJet’s feet — when they wanted to put them on cash-and-carry mode, making them pay in hard cash to operate each flight. This could have been disastrous as liquid capital is something elusive for any struggling company, let alone an airline with a `1,700 crore debt burden.

As the extension was due to end as India rang in 2015, Wednesday was a day fraught with negotiations, drama and suspense — as SpiceJet’s management gave several assurances that they would make the settlements, but did not come through.

“They then began to appeal to the ministry and something must have gone right, otherwise we were fully prepared to charge them for every landing, parking and take-off that they did,” said a senior official in Chennai Airport’s administration.

Indications that the Ashok Gajapathi Raju-led ministry would help SpiceJet out yet again were remote when he made a statement that the airline “would have to work out a solution themselves”. But as things stand, SpiceJet lives to fly another day, or 10, all on AAI’s tab.

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