SpiceJet operations grounded as oil companies stop fuel supply

New Delhi, Dec 17: Flight operations of cash-strapped SpiceJet were grounded on Wednesday morning after oil marketing companies stopped the supply of jet fuel.

"Not even a single flight has taken off till this morning due to fuel supply issue with the oil companies," sources were quoted as saying in media reports.

The state-run oil marketing firms have not yet taken a decision on the resumption of jet fuel supply to SpiceJet on a two-week credit facility, they said.

Amidst pressure from oil marketing companies (OMCs) for payment of their long-pending dues, several flights were also delayed on Tuesday apparently for want of jet fuel.

Later, the company managed to get its aircraft refuelled and the stalled operations commenced, the source said.

The airline has been asking for more time from oil companies and airport operators to clear their dues.

The development comes amidst reports that the state-run Airports Authority of India (AAI) and OMCs have placed the airline on a cash-and-carry mode. Airlines usually pay monthly charges to the airport operators. But under the cash-and-carry mode, they have to make daily payments for their operational requirements.

In the cash-and-carry mode, the airline has to pay every time it uses various facilities of the airport. This includes the navigation, luggage handling, parking, housing and landing charges of the aircraft as well as the ticketing counters.

The airline recently reported a Rs.310 crore loss in the quarter ended September from a Rs.560 crore loss in the corresponding period of the last fiscal.

The airline has also reduced its fleet size and is now operating only 26 aircraft -- down from a fleet size of 35 earlier this year.

The company's auditors SR Batliboi & Associates have expressed doubts about the airline's ability to stay afloat.

OneIndia News
(With agency inputs)