Wednesday, December 17, 2014

India’s SpiceJet Flights Halted as They Wait for Fuel: Airline Cancels Flights as It Doesn’t Have Money or Credit to Pay for Fuel

The Wall Street Journal
By SEAN MCLAIN And  SANTANU CHOUDHURY

Dec. 17, 2014 1:17 a.m. ET


NEW DELHI—The cash-strapped Indian airline SpiceJet Ltd. canceled all of its flights Wednesday as it doesn't have the money or the credit to pay for fuel, said a company executive.

The budget airline had to ground its flights as fuel companies have stopped delivering fuel because it owes them 140 million rupees ($2.2 million), said the SpiceJet executive who asked not to be named. SpiceJet has been slashing its number of flights in recent weeks but it still has around 250 flights a day.

The company’s shares fell over 5% on the BSE Ltd. Wednesday morning.

The loss-making company has been looking for new investors to stay airborne. SpiceJet has posted losses for five straight quarters, and accumulated losses have ballooned to around 30 billion rupees.

The airline needs around 6 billion rupees to solve its cash-flow problems, said S.L. Narayanan, chief financial officer of the Sun Group which owns the airline.

“We don’t want to shut it down,” he said in an interview broadcast on CNBC TV18.

The Indian government had asked fuel companies, banks and airports to give SpiceJet more time to pay its debt.

—Debiprasad Nayak contributed to this article.

Original article can be found at http://www.wsj.com

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