A senior official said state-run Airports Authority of India (AAI) has asked the low cost carrier (LCC) to clear its dues of Rs 200 crore by Wednesday, failing it could be put on cash-and-carry mode, which means it would not be given credit and be required to pay upfront for operating flights.
The ministry, which had asked AAI not to put SpiceJet on cash-and-carry by the year-end will take a final call on this issue on Wednesday. Aviation minister Ashok Gajapathi Raju Pusapati also sounded a cautionary note for the airline on Tuesday. "The government is here to be helpful and it can be helpful but the SpiceJet's problem is its finances which it will have to sort out," he told reporters. The LCC has extended flight cancellations till next month, affecting at least 3,450 flights in Janauary (115 flights daily), which include mostly domestic flights and a few international ones to Nepal and Afghanistan. It had cancelled about 1,800 flights till December 31.
SpiceJet's former promoter Ajay Singh is in talks with a unit of US-based J P Morgan Chase to invest about $200 million in the airline. However, the prospective investors are doing due diligence, which will continue till January-end. Whether the airline can survive in its cash-strapped avatar, till it finds some investors to pump in funds, remains to be seen.
Meanwhile, Raju on Tuesday asked states to lower sales tax on jet fuel. "If they (states) bring taxes on jet fuel down, it will facilitate air traffic. Experience shows that the states, which have brought down taxes on jet fuel prices, have recovered the revenue by higher air traffic growth."
Raju said the civil aviation ministry has sought suggestions from state governments to finalize an aviation policy that can lead to revival of the sector. "Policy is a continuously evolving process."
At a meeting here on Tuesday to discuss the draft aviation policy, Raju expressed concern that despite traffic growth in India, "most of the airlines in the country are reported to have incurred losses and some airlines are struggling to stay afloat." He said the aviation industry as such is seriously affected by factors like high operational costs including cost of aviation turbine fuel (jet fuel), service tax and other charges, shortages of maintenance facilities, high foreign exchange rate and competition from foreign airlines. The last three to four years have seen airlines like Kingfisher, Paramount and MDLR shut down. Now SpiceJet is on the brink.
No comments:
Post a Comment