SpiceJet in trouble?

I’m not trying to set off speculation here, but seems last week has been troublesome for SpiceJet. The airline, one of India’s low-cost carriers, has been plagued by low on-time performance for a long time now (85% on time, lowest amongst domestic scheduled carriers + 78% at Delhi, which is its home airport). Apparently their financial situation has not been too great as well, and they have been talking to Kuwait Airways amongst others for equity partnership.

An indication of how things are for them lies in what happened with them last month, when Airports Authority of India, a government-owned airport operator which operates most of the airports in India, put them on cash & carry, which means they do not have any credit from the airport operator and have to pay their charges per aircraft operation. As per a news report:

State-run Airports Authority of India (AAI) has decided to put SpiceJet on cash-and-carry after the low cost carrier’s dues reportedly crossed its bank guarantee and were not cleared despite reminders from AAI.

Now SpiceJet has categorically denied this arrangement with AAI, however AAI insists that SpiceJet was put on cash and carry since August 30, 2013.

I just hope this incident is settled sooner than later, because such events were the start of the crumbling of Kingfisher Airlines in the past, and we definitely don’t want that for SpiceJet.

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Comments

  1. This is certainly worrisome but I don’t think SpiceJet would turn out to be like Kingfisher. Unlike KF, SG has been profitable in various quarters and has good long term prospects.

    Part of the recent troubles can be shaky or non-existent leadership at the top due to departure of Neil Mills. Overall I remain positive about their future barring few hiccups.

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