New Delhi: Hours after the government threw a lifeline at loss-making airline SpiceJet, asking airport operators and fuel suppliers to give it more time to pay its bills, the country’s second largest budget carrier was reportedly grounded on Wednesday morning, with oil companies stopping fuel supply to it, Press Trust of India quoted airport sources as saying.
On Tuesday, there was chaos at airports with many Spicejet flights cancelled or delayed for over five hours when oil companies reportedly suspended supply of fuel. Flight operations had resumed later in the day.
In a crisis reminiscent of the high-profile downfall of Kingfisher Airlines – which left billions of rupees of debts and unpaid wages – SpiceJet has been battling refunds for customers, forced flight cancellations and a government-imposed ban on advance bookings for travel more than 30 days away.
Seeking to avoid another embarrassing airline collapse, the Civil Aviation Ministry said late on Tuesday that the Directorate General of Civil Aviation or DGCA would be asked to allow SpiceJet to sell advance tickets until March 31, 2015.
Airport operators would be asked to give it 15 days to make payments, while state oil companies would be ask to give credit for up to 15 days, it said.
Banks or other financial institutions could be asked to lend up to Rs 600 crore ($94 million) – backed by the personal guarantee of SpiceJet chairman Kalanithi Maran, a billionaire media tycoon, it said.
The ministry said SpiceJet would have to commit to raising capital itself as soon as possible. Tuesday’s measures, it said, were aimed at avoiding a collapse that it said would be a “major setback” for the sector.
SpiceJet, which has been in the red since last year, has already cut the size of its fleet by a third since September and cancelled more than 70 flights a day for the rest of this year.