SpiceJet seems to be heading the Kingfisher way as AAI (Airport Authority of India) has decided to put the carrier on cash-and-carry basis for using the airport facilities across India.
The dues from the low-cost carriers were more than the bank guarantee. Despite reminders from AAI, SpiceJet did not pay up. Jet Airways which is nearing the limit of the bank guarantee has been told not to exceed it. SpiceJet has been given time till Friday. Rs 357 crores is owed by defunct Kingfisher and Paramount along with others to AAI.
Reacting to reports, the carrier maintains that it is kept to AAI schedules and is well within the limit. An infusion of funds from outside remains a problem for the loss making carrier and till then the promoters have to back it up to maintain requirements, say experts.
It is also facing management issues with the exit of top executives. Lack of business plan could keep away investors. Neil Mills resigning from CEO post has affected the image of the carrier. Cumulative losses of Indian carriers stood at Rs 95,000 crore and it was Rs 53,468 cores in the 2007-2013.
Jet fuel paid in dollars and is hit badly with rupee declining. Major sectors like aircraft lease, maintenance (done abroad) spare parts and salaries to expat pilots are paid in dollars.
In this troubled situation the entry of AirAsia a low-cost carrier with Tata to back it up and operate from Chennai will add to the woes of the existing airlines. Jet with Etihad deal could resurface and Air India is turning around with posting operating profits as it is to get revenue from selling properties and leasing out some.
Yesterday, it decided to do away with business class in new flights. The state-funded carrier acquisition of Dreamliner has given it a boost. SpiceJet has to quickly get investors through the FDI route to keep flying till the clouds are cleared.
No comments:
Post a Comment