New Delhi: The country's second largest low-cost airline, SpiceJet has raised Rs 100 crore from three travel agents since April towards working capital.
This is the first instance when the airline has raised deposits from travel agents. While the agents stand to get higher incentives and productivity commission on the money lent, industry players say the trend points to a possible working capital crunch in the civil aviation sector.
The practice of raising deposits from travel agents is common overseas, however, in India it is not in vogue.
SpiceJet CEO Neil Mills, while confirming the sum raised from agents, said it was minuscule when compared to the company's total revenues.
"Our recent results saw an annual turnover of Rs 5,500 crore and the airline is currently selling approximately Rs 25 crore per day. So an amount of Rs 100 crore is a few days' collections," Mills said in an emailed response.
03/06/13 Mihir Mishra/Indian Express
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This is the first instance when the airline has raised deposits from travel agents. While the agents stand to get higher incentives and productivity commission on the money lent, industry players say the trend points to a possible working capital crunch in the civil aviation sector.
The practice of raising deposits from travel agents is common overseas, however, in India it is not in vogue.
SpiceJet CEO Neil Mills, while confirming the sum raised from agents, said it was minuscule when compared to the company's total revenues.
"Our recent results saw an annual turnover of Rs 5,500 crore and the airline is currently selling approximately Rs 25 crore per day. So an amount of Rs 100 crore is a few days' collections," Mills said in an emailed response.
03/06/13 Mihir Mishra/Indian Express
