New Delhi: SpiceJet made headlines through all of 2014, mostly because of the frequent flash sales it launched to attract customers. Concern was raised on the deteriorating financial health of the airline from various quarters intermittently: the Airports Authority of India (AAI) threatened to withdraw credit facility to the carrier a number of times, auditors termed the airline a "going concern" at quarterly results and employees sent frantic mails in June when SpiceJet failed to turn in the TDS certificate/Form 16 in time. The Directorate General of Civil Aviation undertook a financial audit of the airline in August. But it was only when reports of delays in salary payments started coming out earlier this month that a slew of measures was put in place to safeguard stakeholders (read passengers, vendors, airport operators, lessors) in the event the airline went bust.
What kept the authorities from intervening earlier? SpiceJet had been promising a possible recapitalisation of the airline for some time now. The civil aviation ministry additionally was concerned about the loss of employment (sources quote 20,000 direct and indirect jobs) that the closure of the airline would entail. But others weren't ready to be as accommodating as the government. On December 15, oil companies refused to provide fuel on credit to SpiceJet. Operations were severely disrupted in the next couple of days. It is at this time that Ajay Singh, former promoter and director of SpiceJet, stepped in. Some cash was arranged for the airline to restart operations. SpiceJet has now started operations on 230 sectors, against 345 in July, and has pressed into service 18 Boeing 737s (compared to 37 last year).
29/12/14 Sharmistha Mukherjee/Business Standard
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What kept the authorities from intervening earlier? SpiceJet had been promising a possible recapitalisation of the airline for some time now. The civil aviation ministry additionally was concerned about the loss of employment (sources quote 20,000 direct and indirect jobs) that the closure of the airline would entail. But others weren't ready to be as accommodating as the government. On December 15, oil companies refused to provide fuel on credit to SpiceJet. Operations were severely disrupted in the next couple of days. It is at this time that Ajay Singh, former promoter and director of SpiceJet, stepped in. Some cash was arranged for the airline to restart operations. SpiceJet has now started operations on 230 sectors, against 345 in July, and has pressed into service 18 Boeing 737s (compared to 37 last year).
29/12/14 Sharmistha Mukherjee/Business Standard
