Monday, October 22, 2018

Facing liquidity crunch, SpiceJet took one-time relief for payment of lease

SpiceJet had taken a one-time relief of two to three months towards payment of one lessor in September, as the airline - like its peers - faced liquidity crunch because of rising fuel costs and depreciating rupee.
Last week, rating agency CRISIL had downgraded the bank facilities of SpiceJet from stable to negative, reflecting the pressure airline is facing due to  "significant increase in the operating cost and limited ability to pass on the increased cost to customers due to intense competition."
The airline although issued a statement saying that the downgrade is an industry phenomenon.
"The downgrade is an industry phenomenon and we continue to outperform the industry on financial metrics. However, with regards to one single lessor mentioned in the CRISIL report we had taken a one-time relief of 2-3 months to better manage cash flows during the lean month of September 2018," SpiceJet said in a statement.
SpiceJet's peers Jet Airways and IndiGo are also facing strong challenges in a market that is marked by huge demand but constrained by poor infrastructure and intense competition keeping fares low.
22/10/18 Prince Mathews Thomas/Moneycontrol.com

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