The cash-strapped Airline Company; SpiceJet will submit the rescue plan to civil aviation ministry today. The company was searching for investors and government official asked to submit their plan for revival.
The plan includes investment of Rs. 1,200 crore by a consortium led by former co-promoter Ajay Singh with US investment firm JPMorgan being a constituent. Earlier Mr. Singh and JP Morgan reported yesterday that they were likely to invest Rs 1,200 crore in SpiceJet.
Moreover, on Thursday a civil aviation ministry said, “The prospective investors are coming to meet us tomorrow (Friday) to share a plan for revival. This is expected to give us a clear picture.”
An airline spokesperson said, “SpiceJet had managed to survive a grave crisis. The company was forced to send planes back as it could not pay the lease amounts.”
He further added, “The process of due diligence is underway. Because of Christmas holidays, it is taking some time. The deal is likely to be finalized in the next six weeks.”
In order to revive the carrier, Mr. Singh met the officials on Monday providing detailed measures to them. He said that SpiceJet was executing 345 flights per day in July, which got reduced to the rate of 230 flights per day,. The airline in learned to have 17 Boeing 737s in its fleet, against 37, last financial year. On December 17, due to paucity of funds to purchase fuel, it had operated only 75 flights. However, operations have stabilized, thereafter.
In addition to it, Civil minister Ashok Gajapathi Raju reported that the government was trying to be helpful for the company. However, the airlines needs to clear previous debts.
He further said that, “What SpiceJet is going through is its financial problem. It has to clean up its accounts. We are only trying to be helpful. Why should the government push or pull up any airline? What we need are more players, more airlines, and more connectivity.”
The airline’s dues to foreign vendors, including lessors of aircraft and maintenance, repairs and overhaul (MRO) facilities, had risen from Rs 624 crores on November 24 to Rs 742 crores on December 10.