- SHORT GLIMPSE
- SpiceJet has denied the report of CNBC claiming AAI putting the airline on cash-and-carry mode.
- The airline termed this report as slanderous.
- The airline is looking at a fund raise of more than Rs 2,000 crore.
On June 7, CNBC-TV18 released a report stating that SpiceJet has been put on cash-and-carry mode by the Airports Authority of India (AAI). Operations on cash-and-carry mode means that an airline needs to pay for its services and fees in advance and that too in cash, instead of receiving credit. Costs include ground handling, airport charges like UDF, fuel, and other operational services.
However, SpiceJet has refused the allegations stated in this report, terming them as baseless.
SpiceJet: Allegations in CNBC Report
On June 7, CNBC TV18 published a report, in which an AAI official told the publication that the airport authority has put SpiceJet on a cash-and-carry mode at all the AAI-managed airports. Every airport operator has a pending payment limit. Once the dues exceed this limit, the operator puts the airline in cash-and-carry mode. This is done after proper discussions with the airline.
The AAI spokesperson said that there have been multiple instances when the airline has delayed the payments. Healthy airlines like IndiGo and Air India get a 15-day credit facility to pay the airport charges to the operator.
AAI manages 137 airports in India, including 24 international and 80 home airports. Major airports like Chennai and Kolkata are operated by AAI. Almost all the airports in Tier-2 and Tier-3 cities are managed by AAI.
SpiceJet Denies the Report
In a conversation with Ch-aviation, a SpiceJet spokesperson said that the report was incorrect and false. He termed the report as slanderous. The airline has already deposited a bank guarantee of Rs 40 crore with the Airports Authority of India (AAI). Hence, there is no pending payment.
SpiceJet is recovering from a financial earthquake. The walls of the house are gone. Only the pillars remain. The airline is looking to raise funds worth Rs 2,000 crore in August month. With this, it will be increasing its fleet.
It has already signed a lease agreement with BBN Airlines Indonesia for four Boeing 737s. BBN Airlines Indonesia is a part of Avia Solutions Group, the largest ACMI provider in the world.
Entering the summer schedule, the airline has suspended operations at various airports. It has ceased operations at Puducherry and Port Blair Airport. In addition, it temporarily suspended operations from Chennai Airport citing financial troubles.
Conclusion
Recently, CNBC-TV18 published a report in which an AAI official said that SpiceJet has been put on cash-and-carry mode. However, the airline has refuted this report. According to SpiceJet, it already has a Rs 40 crore bank guarantee with the Airports Authority of India (AAI). Hence, no question of pending dues should arise.
What do you think will be the future of SpiceJet? Discuss in the comment section.
With Inputs From Ch-aviation, CNBC-TV18
Featured Image Credits: Saif Zaman via Wikimedia Commons
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1 Comment
It’s a miracle that spicejet is even surviving so far. By hook or by crook they know how to pull on. Hope a new management comes in and it rises once again. It has the potential to be the 2nd Indigo for Indian aviation. Only if the right person heads it.