In more relief for budget carrier SpiceJet, it has been allowed to accept ticket bookings till March, 31, 2015 by aviation regulator Directorate General of Civil Aviation or DGCA.
This will help the airline get much needed working capital. SpiceJet stock, which was down 17 per cent since morning, saw a sharp recovery and ended nearly 3 per cent up.
The DGCA had last week asked the airline not to offer advance booking of air tickets beyond 30 days. It also asked SpiceJet to prepare a payment plan for vendors by yesterday (December 15) and to clear salary dues of all its employees.
It has as yet failed to satisfy the DGCA with a fresh proposal on equity infusion in the company.
Analysts believe unless the promoters pump in money, it would be curtains for the airline. SpiceJet is controlled by billionaire Kalanithi Maran's Sun Group.
"This is a myth... no way this airline can recover unless there is a massive induction of funds," former DGCA advisor Denzil Keelor told NDTV.
The government had on Monday said it was willing to give SpiceJet a "very short period" to come up with a recapitalisation plan, after the airline's chief operating officer Sanjiv Kapoor met Civil Aviation Minister Ashok Gajapathi Raju to reportedly seek "urgent financial help" to run its daily operations.
Sources said the aviation ministry would forward SpiceJet's request to the Prime Minister's Office and the Finance Ministry.
Analysts say the carrier needs equity infusion of over Rs 2,000 crore immediately to keep it off the ground.
"To be honest with you I don't know what's going to happen in two weeks if the promoters don't come in. If the money doesn't come from promoters it will be a closed case," Kapil Kaul, CEO South Asia, CAPA-Centre for Aviation, told NDTV.
The airline was given two weeks on Monday to come up with a recapitalisation plan, according to sources.
SpiceJet is deeply in the red with a liability burden of over Rs 2,000 crore and owes money to airports, oil companies as well as its employees.
This morning, the airline cancelled a total 97 flights and others were delayed as oil companies reportedly refused to supply it fuel on credit leaving hundreds of angry passengers stranded at airports across the country.
Flights resumed later in the day. SpiceJet said in a statement, "There was some temporary operational issue. Flights have now resumed."
Concerned over the poor financial health of major players in the aviation sector, the Civil Aviation Minister on Tuesday met officials from the Finance and Petroleum Ministries to work on long-term policy changes in the sector, according to government sources. "You must understand that government of India cannot be helping an individual company but policy needs a careful relook," said a senior official in the ministry.
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