Its wings have been clipped and its financial wounds are bleeding it, but the beleaguered budget carrier SpiceJet is cruising along. How long will it be able to survive this way?
Most in the industry, and those with deep insight of airline business, say if things continue the way they are today the no-frill airline will have to shut down operations in four to five months. And if the situation deteriorates, then it would take it much less time to crash.
A senior executive of an airline, who did not want to be named, said reduction of Boeing fleet from 37 to 22 had already brought down troubled airline's cash flows, and now with the Directorate General of Civil Aviation's (DGCA) directive of curbing bookings beyond 30 days will dwindle it further.
"When inflow (of revenue) is not coming, how will they be able to manage outflow (expenditures). If they have to be in the air, they have to spend on jet fuel, aircraft leases, staff and other operational costs. The way things stand today, it will be difficult for them meet these costs with the revenue that is coming. This way, they will be able to survive not more than 4-5 months," he said.
11/12/14 Praveena Sharma/Daily News & Analysis
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Most in the industry, and those with deep insight of airline business, say if things continue the way they are today the no-frill airline will have to shut down operations in four to five months. And if the situation deteriorates, then it would take it much less time to crash.
A senior executive of an airline, who did not want to be named, said reduction of Boeing fleet from 37 to 22 had already brought down troubled airline's cash flows, and now with the Directorate General of Civil Aviation's (DGCA) directive of curbing bookings beyond 30 days will dwindle it further.
"When inflow (of revenue) is not coming, how will they be able to manage outflow (expenditures). If they have to be in the air, they have to spend on jet fuel, aircraft leases, staff and other operational costs. The way things stand today, it will be difficult for them meet these costs with the revenue that is coming. This way, they will be able to survive not more than 4-5 months," he said.
11/12/14 Praveena Sharma/Daily News & Analysis
