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Wednesday, December 17, 2014

Many SpiceJet Ailines Flights cancelled till late afternoon on Tuesday; Ailine denied fuel uplift on pending dues

India 

Petroleum Minister of India Dharmendra Pradhan told FE, We do not interfere in day to day working of the OMCs. Supplying to Ailines is a commercial decision. In case government takes a holistic decision (for Low Cost SpiceJet Ailines ), we would follow the same. Till now the petroleum ministry has not interfered.

In a response to queries, a Low Cost SpiceJet Ailines  spokesperson said, “There was a temporary operational issue. Flights have now resumed.”
Incidentally, oil marketing companies (OMCs) like HPCL and IOC had already put the Kalanithi Maran promoted low cost carrier on a cash and carry mode for several weeks because of the Ailine’s worsening financial condition. In contrast to a credit line on which Ailines operate, cash and carry means that the Ailine has to pay for fuel every time a Flight takes off.

Low Cost SpiceJet Ailines  is buying fuel from public sector OMCs on cash-and-carry model. Its ATF bill could range up to Rs 6-10 crore a day in Delhi Aiport in a day, an oil ministry official said.

Low Cost SpiceJet Ailines  has total liabilities of over Rs 2,000 crores to vendors, tax authorities and service providers, of which it needs to clear dues of Rs 1,500 crore immediately to continue operations, a top civil aviation ministry official said on Monday after day long meetings with the company management to find a lifeline.

On Monday morning, Low Cost SpiceJet Ailines  management had also sent an email to all Pilots asking them to be prepared for any eventuality in terms of survival for the Ailine. Later in the day, promoter Kalanithi Maran was understood to have given a personal guarantee to the government for payment of Aiport dues of about Rs 200 crore, leading the ministry to extend the payment deadline by a week.
Low Cost SpiceJet Ailines , which posted a record loss of Rs 1,000 crore in 2013-14 and has run up accumulated losses of INR 3,000 crore, currently apart has a negative net worth of Rs 1,5oo Crore.













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