Friday, April 24, 2020

India’s SpiceJet is seeking government funds to tide over coronavirus crisis

Indian low-cost carrier SpiceJet has asked the government for relief to ease the strain on its cash flow as it seeks to navigate the challenges brought on by the coronavirus, chairman and managing director Ajay Singh said Friday.

SpiceJet is one of the largest airlines in India, based on the number of domestic passengers it carries.

Like other countries, India’s airlines are in crisis as the country’s extended lockdown measures to reduce the spread of the coronavirus has left all passenger planes grounded till at least May 3, leading to a depletion of cash reserves for the airlines.

The Indian government has consulted the aviation industry on its needs and is working on a relief package that is expected soon, Singh told CNBC’s Tanvir Gill in an interview.

“We’ve asked for some issues which relate to cash flow, which is, of course, in short supply at this time,” Singh said. “We have asked them to help out with some of the salary payments, we’ve asked them to help ... with some of the airport charges.”

To be clear, there has not been any official announcements of a relief package for the aviation industry yet.
He added that the current crisis provides an opportunity for the Indian aviation industry to sort out some of the structural problems that have made it less competitive against its global peers.

That includes the high levies paid on aviation fuel that are not counted under the goods and services tax regime, according to Singh.
Airlines around the world are struggling as the pandemic grounds most passenger air travel.

Large global carriers like Singapore Airlines and Emirates have grounded most, if not all, of their fleets. Others have applied for government grants to pay salaries to employees. Some, like Virgin Australia, have run out of cash and succumbed to restructuring.
24/04/20 Saheli Roy Choudhury/CNBC TV18
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