SpiceJet likely to bring more trouble for other airlines, Govt may fix minimum airfares

New Delhi, Dec 18: SpiceJet has resumed its operation across the country. However, this may not be a good news for other airlines which may face more restrictions from the government.

According to sources, the aviation ministry have been preparing a series of proposals which will be submitted to the PMO soon. Fixing the minimum air fare for each route for all domestic airlines will be one of the proposals, informed sources.

The government does not have any authority to regulate the minimum airfare set by any airlines. SpiceJet was the airlines which came up with several low fare offers at different times in 2014.

SpiceJet, which was in big trouble since last 72 hours, resumed operations after being forced to cancel over 150 flights with oil marketing companies refusing to refuel its planes forcing the budget carrier to pay Rs 3 crore last evening to buy jet fuel.

"So far, the operations are going as scheduled," airport sources said, as the airline flew at least five flights out of Delhi till 1000 hours to Mumbai, Jaipur, Port Blair, Kochi and Varanasi.

The airline came out of the brink on Thursday, Dec 18 after all its flights were grounded for about ten hours yesterday before it made part payment of Rs three crore to oil companies enabling it to partly resume operations. Of the 243 listed flights, it claimed to have operated 75 across the country after 1600 hours yesterday.

Ajay Singh, one of the original promoters of SpiceJet, met with Civil Aviation Secretary V Somasundaran fuelling speculation about the former planning to invest in the carrier once again.

Singh refused to reply to questions on whether he would invest, but said SpiceJet had a "lot of potential".

S L Narayanan, CFO of the airline's parent company Sun Group, told PTI, "We need some breathing time...if we get a reprieve from the banks and Mr (Kalanithi) Maran is ready to give guarantee we can restart the engine. Once the collection starts coming in, we will pay (the dues)."

Maran has already invested around Rs 820 crore in the last three years and he has invested whenever the airline has needed money, he said.

The Civil Aviation Ministry's decision not to allow SpiceJet to take bookings beyond 30 days turned counter- productive, affecting its daily earnings. This forced the Ministry to put on hold its decision.

It had also asked oil companies and airport operators to extend a 15-day credit facility to SpiceJet to save the airline from shutting down.

The Ministry's intervention, however, came with a rider that the beleaguered airline will commit capital infusion at the earliest.

The airline has total liabilities of Rs 2,000 crore which include dues to the public sector oil firms and the Airports Authority of India (AAI).

The last time an airline to stop operations under mounting losses was two years ago when Kingfisher, which had outstanding of around Rs 6,000 crore, shut down.

OneIndia News
(With agency inputs)