Monday, October 22, 2018

Jet, SpiceJet seek lease rent moratorium amid weak rupee, high oil prices

Mumbai/Delhi: To avoid a default on loan payments, Jet Airways and SpiceJet have sought a moratorium on lease rent payment.

A weakened rupee, surge in crude oil prices and inability to raise fares have put pressure on all airlines, tightening their liquidity situation. In this backdrop, ratings agencies have downgraded the debt of all three listed airlines, including that of IndiGo, the market leader.
CRISIL has downgraded the rating of SpiceJet's Rs 14.45-billion debt, from the earlier BBB to one of BB-minus. ICRA has downgraded the rating for IndiGo's Rs 80-billion loan to A+ from the earlier AA.
A SpiceJet spokesperson said the airline had secured a one-time relief of two to three months from a lessor. "The rating downgrade is an industry phenomenon and we continue to outperform the industry on financial metrics," the spokesperson added.
Jet Airways did not respond to a query but sources said it had sought discounts and easier payment terms, including 60-90 days of moratorium on its lease payments.
Jet has 124 aircraft in its fleet; 108 of these are on an operating lease (use for a specific period, without onwership transfer). In the case of SpiceJet, 47 of its 60 planes are on an operating lease.
22/10/18 Aneesh Phadnis & Arindam Majumdar/Business Standard