India's SpiceJet grounds fleet after running out of fuel

GMT 13:42 2014 Wednesday ,17 December

Arab Today, arab today India's SpiceJet grounds fleet after running out of fuel

India's SpiceJet
New Delhi -AFP

Troubled Indian airline SpiceJet grounded its fleet Wednesday after suppliers refused to refuel its planes due to unpaid bills, company officials said.
The no-frills airline, one of India's leading carriers, has a fleet of 37.
The action left thousands of angry passengers stranded at airports across the country.
The fleet's grounding came a day after the government asked state-run oil companies and airport authorities to extend emergency credit to the debt-ridden airline, which last week cancelled nearly 1,900 flights due to cashflow woes.
"The fuel companies are not refuelling any of the aircraft due to the airline's fragile situation at the moment," a SpiceJet source told AFP on condition of anonymity.
S.L. Narayanan, chief financial officer of SpiceJet's parent Sun Group, said the decision to ground the fleet was "forced on our hands as a result of lack of fuel supply".
"The situation is just two to three days of overdues and the whole house has come crashing down on us," Narayanan told India's CNBC-TV18 news channel.
The Press Trust of India said no flights had taken off Wednesday and state oil companies were still deciding whether to extend credit to the airline.
But SpiceJet chief operating officer Sanjiv Kapoor later posted on Twitter that flights would resume by 4:00 pm (1030 GMT).
"We apologise again for the disruptions," Kapoor said.
Narayanan said the carrier needed six billion rupees ($94 million) to "get us going and I am very confident that we will turn around".
He added the parent company could not afford to bail out the cash-strapped budget carrier.  
The Civil Aviation Ministry on Tuesday said banks may be asked to lend as much as $94 million to keep the carrier in the air, backed by the personal guarantee of Indian billionaire Kalanithi Maran.
More than 50 percent of SpiceJet is controlled by Maran, who heads the southern family-owned Sun media group.
Television footage showed irate passengers arguing and shouting at SpiceJet staff, demanding refunds.
SpiceJet approached the government on Monday, asking for emergency help to stay afloat.
The ministry has already eased booking curbs imposed after the carrier cancelled flights and missed salary payments.
The carrier laid out a recovery plan two months ago that involved using fewer and newer planes.
Even with the fall in jet fuel prices, which represents over 40 percent of an airline's operating costs, the airline is still facing a cash crunch.
India has a congested airline market where fare competition is fierce and operating costs are high. All but one of its big four carriers are operating in the red.
There is speculation SpiceJet could end up being permanently grounded like Indian tycoon Vijay Mallya's Kingfisher Airlines, which stopped flying in 2012 after running up huge debts.
SpiceJet shares were down 5.04 percent at 13.20 rupees Wednesday afternoon.


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