Budget airline SpiceJet got temporary reprieve when the government reportedly gave a 10-day extension on a deadline to pay 194 crore to the Airports Authority of India. AAI. The company was supposed to pay the amount by Monday.
The cash-strapped airline sought the extension on Monday at a meeting attended by Sanjiv Kapoor, its chief operating officer and SL Narayanan, the chief financial officer of its parent Sun Group, with Minister of State for Civil Aviation Mahesh Sharma and aviation regulator.
SpiceJet's executives told the government that the airline could fold "tonight or in 30 days," unless the Centre allowed the airline to continue flying, without having to pay oil firms and aviation authorities in advance, reported The Times of India.
Sharma said, "SpiceJet has requested for relief. We will discuss within the ministry and put whatever decision emerges before seniors in the Government. This will be done in the interest of passengers. No commitment or assurance has been given to SpiceJet." reported BusinessLine.
Recapitalization Plan
On Monday, SpiceJet was to submit a recapitalization plan on how it seeks to continue operations and also a timeline on when the creditors are to be paid.
However, the plan submitted to the Directorate General of Civil Aviation (DGCA) had no new development. There was also no mention of roping in investors to infuse fresh capital.
The beleaguered airline needs 1,400 crore capital infusion immediately, followed by 600 crore later, if it has to continue flying.
The airline faced a deadline on Monday to pay the AAI an outstanding sum of 194 crore, else to pay upfront or usage of facilities, starting from Tuesday.
On Tuesday, the airline scrip was trading at 11.75, down 1.80 or 13.65% at 10.38 am.
