New Delhi: Low cost carrier SpiceJet’s shares crashed 17% to a new low of Rs 11.25 Tuesday amid rising concerns about the viability of the airliner.
SpiceJet is on the brink of shutting down operations with analysts comparing the ailing carrier to grounded Kingfisher Airlines, which stopped operations two years ago in similar circumstances.
SpiceJet has a liability burden of over Rs. 2,000 crore and owes money to airports, oil companies as well as employees. Analysts say the carrier needs equity infusion of over Rs. 2,000 crore immediately to keep it off the ground.
SpiceJet has lost money for five consecutive quarters and it has scrapped thousands of flights in a bid to cut down losses.
On Monday, SpiceJet’s chief operating officer Sanjiv Kapoor met Civil Aviation Minister Ashok Gajapathi Raju to reportedly seek “urgent financial help” from the government to run its daily operations.
Sources said SpiceJet has got a temporary breather from the government.
State-run Airports Authority of India will not press for clearance of Rs 200 crore dues immediately after the airline’s promoter Kalanithi Maran gave personal guarantees to infuse more funds, sources said.
Mr Maran has infused about Rs 250 crore in the airline this year, but that has not helped finances, sources said.
“They have requested for some relief. We’ll discuss that with seniors in the government, other ministries like finance and oil and take the issue up to the PMO. However, we have given no assurance to SpiceJet. We will take a final decision keeping wider interest of passengers in mind,” Minister of State for Civil Aviation Mahesh Sharma said.
Shares in SpiceJet, India’s second biggest budget carrier, have now dropped 26 per cent in last five trading sessions. As of 10.32 a.m., SpiceJet traded at Rs 11.55, down 15 per cent, and pretty close to its 52-week low of Rs 11.10.
(With inputs from agencies)