Agencies/New Delhi
Cash-strapped budget carrier SpiceJet resumed flights yesterday evening after a harrowing day for passengers with a bulk of its scheduled flights cancelled.
More than 100 SpiceJet flights were cancelled since yesterday morning as oil companies refused to provide fuel to the company citing non-payment.
Local television channels showed distraught and angry passengers gathered at airports saying they had received no information of cancellations.
Operations resumed with a skeletal service after the management said it had reached an agreement with oil companies over the supply of fuel, NDTV reported.
“SpiceJet apologises for disruption and pain caused to passengers due to stoppage of fuelling for our flights by the oil companies,” chief operating officer Sanjiv Kapoor said.
The carrier was earlier placed on a cash-and-carry mode under which it had to pay immediately for fuel. But it failed to pay cash on Tuesday and gradually its aircraft ran out of fuel, NDTV reported.
The civil aviation ministry stepped in late Tuesday asking the state-run oil companies and airport operators to extend a two-week credit facility.
“We are looking at all the pros and cons and the problems the passengers are facing,” junior minister for civil aviation, Mahesh Sharma, said.
“We can take measures to help the industry, or passengers, but not one single company,” Sharma said.
The airline is estimated to owe the oil companies and airport authorities an estimated Rs20bn ($314mn).
The ministry had also said it may request Indian banks and financial institutions to extend short-term loans to SpiceJet while asking the airline’s management to immediately organise a capital infusion.
Owned by Chennai-based Sun Group of Kalanithi Maran, SpiceJet operates more than 250 flights daily.
More than 50% of SpiceJet is controlled by Maran.
The civil aviation ministry has already eased booking curbs imposed after the carrier cancelled flights and missed salary payments.
The carrier laid out a recovery plan two months ago that involved using fewer and newer planes.
Even with the fall in jet fuel prices, which represents over 40% of an airline’s operating costs, the airline is still facing a cash crunch.
India has a congested airline market where fare competition is fierce and operating costs are high. All but one of its big four carriers are operating in the red.
There is speculation SpiceJet could end up being permanently grounded like tycoon Vijay Mallya’s Kingfisher Airlines, which stopped flying in 2012 after running up huge debts.
SpiceJet shares were down 5.04% at Rs13.20 yesterday afternoon.
Local media have reported that the accumulated losses of India’s aviation industry over the last seven years has risen to $8.6bn.
