SpiceJet resumes flights after fuel row

UPDATE:  Indian airline SpiceJet resumed flights late Wednesday afternoon following an agreement to pay cash for fuel purchases, hours after it grounded its fleet and stranded thousands of travellers.

The no-frills airline, one of India's leading carriers, was forced to cancel all flights after suppliers refused to refuel its planes due to unpaid bills, leaving thousands of angry passengers in the lurch at airports across the country.

"We have resumed operations. We paid in cash at some airports," a source in the airline told AFP on condition of anonymity.

SpiceJet chief operating officer Sanjiv Kapoor tweeted an apology for inconvenience caused to passengers, who were shown on local TV shouting at SpiceJet staff, demanding refunds.

"We apologise again for the disruptions," Kapoor said.

The fleet's grounding came a day after the government asked state-run oil companies and airport authorities to extend emergency credit to the debt-ridden airline, which last week cancelled nearly 1,900 flights due to cashflow woes.

S.L. Narayanan, chief financial officer of SpiceJet's parent Sun Group, said the decision to ground the fleet was "forced on our hands as a result of a lack of fuel supply".

"The situation is just two to three days of overdues and the whole house has come crashing down on us," Narayanan told India's CNBC-TV18 news channel.

Narayanan said the carrier needed six-billion rupees ($94 million) to "get us going and I am very confident that we will turn around".

The Civil Aviation Ministry said on Tuesday banks may be asked to lend as much as $94 million to keep the carrier in the air, backed by the personal guarantee of the airline's controlling shareholder, Indian billionaire Kalanithi Maran.

SpiceJet had approached the government on Monday for emergency help to stay aloft.

The ministry has already eased booking curbs imposed after the carrier cancelled flights and missed salary payments.

The carrier, which has a fleet of 37 planes, laid out a recovery plan two months ago that involved using fewer and newer planes.

But even with the fall in jet-fuel prices, which represents over 40 percent of Indian airlines' operating costs, the carrier is still facing a cash crunch.

EARLIER REPORT

Residents of Dubai and Sharjah found several of their SpiceJet flights affected on Tuesday as the troubled Indian carrier saw its fleet grounded with oil companies stopping jet fuel supply to it.

Dubai Airports board indicated flights from Delhi, Madurai and Cochin remained cancelled, meanwhile Sharjah Airport authorities have confirmed SpiceJet flights SG051 and SG052 connecting Pune, scheduled for December 16 were also cancelled.

A confirmation is awaited from the carrier, with things expected to return to “normal” on Wednesday as the Indian civil aviation ministry stepped in to offer a reprieve with a government bailout package.

Meanwhile, a PTI report quoted the carrier’s COO Sanjiv Kapoor as saying that SpiceJet flight operations would resume by 4pm (2.30pm UAE time).

The loss-making SpiceJet owes money to creditors including oil companies.

On Tuesday, the civil aviation ministry told Reuters that airport operators would be asked to give the airline 15 days to make payments, while state oil companies would be ask to give credit for up to 15 days.

The measures, the ministry said, were aimed at avoiding a collapse which it said would be a “major setback” for the civil aviation sector.

A passenger flying from Kochi to Male found herself stranded at the airport when her flight to the Maldives capital was ‘delayed indefinitely’.

Speaking to ‘Emirates24|7’, Divya Thampi-Reddy said: “We were booked to fly on December 16 to Maldives for a three-night holiday for my sister’s 30th birthday celebrations.

“The airline staff checked us in, issued our boarding passes for the flight scheduled to take off at 12.50pm from Kochi airport, and then, nothing happened.”

She continued: “We sat there at the gate, which continued to indicate the flight was ‘on time’, but no SpiceJet representative was at the gate to provide us with further information.”

Thampi-Reddy, along with her sister and her young son, waited at the airport in the dark until 6pm, when an airport ground staff member arrived to inform them the flight had been delayed indefinitely.

She added: “They refused to say the flight was cancelled. And we waited around if we hoped for any sort of refund, but finally, even we admitted defeat and took their advice to off-load ourselves and pay the Rs3,000 charges per person so we can finally get out of the airport.”

The Chennai resident said the airline did not so much as offer them food vouchers during the ‘harrowing experience’, adding that with no accommodation alternatives offered, the trio checked into the Taj Kochi to spend the next few nights.

“The sad part is, there was a Sri Lankan Airline flying out at 4.15pm. Had SpiceJet given us an inclination, we would have made alternate arrangements,” she revealed. “My hotel in Maldives is costing us $900 per night and is non-refundable. Will SpiceJet cover that expense, too?”

Dubai resident Shazil Zarook, who is currently in India and booked to fly from Kochi to Goa also found himself stranded in the city.

He said: “GoAir put out a flight after this was announced but it’s costing me more than my to and fro India ticket!”

Parent company Sun Group head was further quoted as saying it cannot make large investment into the carrier and can do no more than provide a guarantee for a bank loan needed to keep the airline from collapsing.

The Chief Financial Officer, SL Narayanan, stated: “We do not have the liquidity to invest large sums at the time which is why we need bank financing. For which the promoters are willing to provide a guarantee. We cannot do more than this.”

The civil aviation ministry has stated banks have been requested to give the airline a working capital loan, which needs to be paid back within eight weeks by when the airline is expected to arrange for long-term investments.
 
 

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