Will SpiceJet continue to fly amid massive financial crisis?

Despite promoter Ajay Singh pumping Rs 500 crore (Rs 5 billion) into the cash-strapped airline, industry watcher say, SpiceJet needs at least 1,500 crore (15 billion) more to stay afloat.

Budget-carrier SpiceJet has sought a deferment of three years on the payment of dues of Rs 211 crore (Rs 2.11 billion) to AAI though sources said that the airport operator is disinclined to entertain the request after the airline received a recent infusion of funds.

The airline has also requested the Airports Authority of India (AAI) to waive the interest against these dues on account of payment of charges towards landing, parking and other support services availed by the carrier. The dues in question run for a period of 18 months.

AAI, which had bailed out SpiceJet by extending a two-week credit window to the airline during its financial crisis last year after Civil Aviation Ministry's intervention, has this time, however, rejected the plea, sources told PTI.

A SpiceJet spokesperson could not be contacted for comments.

The airline has already cleared the dues of other creditors such as oil companies and aircraft lessors, among others, after it received Rs 500 crore (Rs 5 billion) in investment by its new promoter, Ajay Singh, as part of the first tranche of the Rs 1,500 crore (Rs 15 billion) infusion he has lined up for the airline.

"SpiceJet has asked for a three-year moratorium on payment of dues besides a complete waiver on the interest payables. AAI has, however, outrightly rejected the move because the airline is now far more financially stable than last year," sources said.

AAI's per-day billing to SpiceJet towards landing, parking and other support services currently stands at Rs 78 lakh, sources said, adding, "It has asked the airline to pay an additional Rs 50 lakh per day over and above the daily payment to clear these dues."

Along with the addition of as many as 60 flights to its summer schedule, the airline last week inducted three wet- leased Boeing 737s to cater to the summer rush.

It currently has 35 planes in operation with 20 of them being Boeing 737s and the rest Bombardier Q400s.

Due to the cash crunch of last year, SpiceJet had reduced the total number of flights to 210 per day from 345.

Singh had pumped in Rs 500 crore into the carrier after he took over control of the airline in February from its erstwhile promoters, the Maran family, as part of the airline's revival plan.

Under the deal, the Maran family transferred its entire 58.46 per cent holding in the no-frills carrier to Singh, who had co-founded SpiceJet along with the then majority stakeholder, Bhupendra Kansagra, in 2005.

Singh had, however, divested almost his entire stake to the Kalanidhi Maran-owned Sun Group in 2010 along with Kansagra, retaining only a minuscule 1.85 per cent share with himself.