CRISIL Ratings on Tuesday downgraded Spice Jet’s bank facilities from ‘BBB Stable’ to ‘BB- Negative’ as it believes the company’s performance will remain under pressure in the near-to-medium term on higher jet fuel prices and delay in sale and lease back transactions on aircraft.
Operating costs will increase as airlines are not able to hike fares to compensate for higher fuel costs on intense competition, CRISIL said.
“Due to stretched liquidity, the company has sought a three-month relief window from its lessor towards payment of leases. Delay in delivery of Boeing 737MAX aircraft further led to liquidity mismatch as the company was to receive healthy profits on sale and lease back transaction,” it said.