DGCA asks SpiceJet to give funding plan by Dec 15

SpiceJet’s Chief Operating Officer Sanjiv Kapoor and Sun Group chief financial officer S L Narayanan met Director General of Civil Aviation Prabhat Kumar in Delhi on Tuesday.

The Directorate General of Civil Aviation has refused to relax its restriction on SpiceJet’s advance bookings and once again asked the airline to submit in writing a credible funding plan by December 15.

SpiceJet’s Chief Operating Officer Sanjiv Kapoor and Sun Group chief financial officer S L Narayanan met Director General of Civil Aviation Prabhat Kumar in Delhi on Tuesday.

The duo apprised the regulator of fund-raising initiatives, but the DGCA has sought more details, sources said.

During the meeting, SpiceJet gave assurances that investments were in the process of being firmed up, a senior government official said.

However, given that the airline has been talking about 'closing deals with an investor' over the past few months, which hasn’t materialised as yet, the regulator asked it to submit concrete plans in writing.

The airline management has now sought a meeting with civil aviation minister Ashok Gajapathi Raju to present the airline’s plan.

Last Friday, the DGCA had withdrawn 186 slots belonging to the airline and directed the carrier to stop bookings beyond 30 days.

The airline complied with the order regarding advance bookings on Tuesday after the regulator warned of a show-cause notice for non-compliance.

Separately, Kapoor and Narayanan also met officials of the Airports Authority of India.

The moratorium granted by the AAI to SpiceJet is scheduled to expire on Wednesday and the airline might be put on ‘cash and carry’ on failure of clearing payments or providing bank guarantee on dues of Rs 200 crore (Rs 2 billion).

DGCA sources pegged SpiceJet's total dues at Rs 1,600 crore (Rs 16 billion), which the airline owes lessors, vendors, income-tax department and airport operators.

However, the airline has contested this figure, saying the actual dues are much lower.

After reviewing the financial and operational parameters of the Budget carrier, DGCA had issued a series of instructions to the airline on Friday.

The DGCA also instructed the airline not to accept bookings for the cancelled flights and refund all affected passengers within a month.

Responding to the DGCA’s directions, Kapoor said in a statement: “SpiceJet informed the DGCA and the public that for the near-medium term, it intends to operate a fleet of 22 Boeing737s and 15 Q400s, down from the 37 B737s we operated earlier this year.

As a consequence of the fleet reduction of 15 Boeings, unused slots are given back to the airports.”

On future bookings on cancelled flights, he said: “This has already been stopped as part of standard process.” SpiceJet has cut its Boeing 737 fleet to 24 aircraft from 42 at the end of last year.

The sharp cut had forced the airline to reduce its daily flights by a third to 232, sources said. SpiceJet is currently operating 232 flights a day, compared with 340 a day in September.