SpiceJet's flights to resume in evening after being grounded on fuel issue
After all its flights remained grounded for most part of Wednesday, cash-strapped SpiceJet resumed operations in the evening as oil companies, which had stopped fuel supplies to its aircraft, eased the restriction
New Delhi: Offering respite to hundreds of SpiceJet passengers stranded across India Wednesday, the company's management said it will resume operations from 4 p.m. onwards as an understanding has been reached with the oil companies over the supply of jet fuel to its aircraft.
"Flights will depart on or after 4 p.m. today. We apologize again for the disruptions," said Sanjiv Kapoor, chief operating officer of SpiceJet.
"Spicejet apologizes for disruption and pain caused to passengers due to stoppage of fuelling for our flights by the oil companies. We are working to resolve the issue."
Kapoor's assurance comes after a re-run of a Kingfisher-type fiasco which resulted in passengers being stranded across the country as all SpiceJet flight operations were grounded.
The operations were grounded after oil marketing companies (OMCs) refused to provide SpiceJet with credit to buy jet fuel over the issue of non-payment of dues.
The company currently has around 250 departures per day with maximum operations being carried out from Delhi and Mumbai.
The OMCs had placed the budget airline in the cash-and-carry mode under which the company has to make spot payments for buying fuel.
Sources in the airline said the Tuesday order by the civil aviation ministry giving it interim relief in terms of payment of dues is being studied by the OMCs and that they might restart supply by the afternoon.
On Tuesday, SpiceJet was given an interim relief, even as its promoters were told to infuse fresh equity.
The ministry had said that it will request OMCs to give credit to the airline for 15 more days. The airline is current under cash-and-carry mode with OMCs, which mandates that it has to make spot payments for buying fuel.
The daily fuel cost of the airline is about Rs.5 crore, while it has dues totalling Rs.14 crore pending with the OMCs.
The ministry had said that banks may also be approached to give some working capital as loans.
"Based on the assurances by the promoters, the financial institutions would be requested to lend up to Rs.600 crore. This should be paid immediately after securing the long-term investment which will take around eight weeks to consummate," the ministry said in a statement.
The finance ministry's approvals have also been sought to permit external commercial borrowing (ECB) as working capital for the airline.
The ministry's relief package came a day after the company submitted an operations plan for safety and financial revival to the industry regulator.
The company's top management had also met Civil Aviation Minister Ashok Gajapati Raju Pusapati and his deputy Minister of State for Civil Aviation Mahesh Sharma Monday for relief.
The airline has been asking for more time from oil companies and airport operators to pay their dues.
Meanwhile, the scrip of the beleaguered airline fell by around five percent on the Bombay Stock exchange (BSE) Wednesday at Rs.13.25 per equity (12.40 p.m.).
The airline recently reported a Rs.310 crore loss for the quarter ended September, down from the Rs.560 crore loss in the corresponding period of last fiscal.
It is now operating only 26 aircraft from 35 earlier this year.
Even the airline's auditors, SR Batliboi & Associates, have doubted its ability to stay afloat.