Sun. Sep 25th, 2022

SpiceJet said on Tuesday that it has reached an agreement with the Airports Authority of India (AAI) and settled all outstanding major dues from the airport operator.

“With this, SpiceJet will no longer remain in ‘pay and carry’ at AAI-managed airports across the country and will return to the pay-in-advance mechanism for daily flight operations,” the airline’s statement said.

In 2020, the hub-run AAI put SpiceJet on a ‘pay cash’ basis as the airline was unable to settle its previous dues.

In the ‘cash and carry’ model, the airline has to make daily payments to the AAI for various charges (navigation, landing, parking and others) to operate flights.

SpiceJet said on Tuesday: “In another big boost for the airline, AAI will release SpiceJet’s INR 50 crore bank guarantee after the airline pays all of its major dues. This will result in additional liquidity for the airline.”

SpiceJet has been losing money for the last four years. It incurred net losses of Rs 316 crore, Rs 934 crore and Rs 998 crore in 2018-19, 2019-20 and 2020-21 respectively.

In the period from April to December 2021, the airline posted a net loss of Rs 1,248 crore. The airline has not yet declared results for the January-March 2022 period.

Aviation regulator DGCA ordered SpiceJet on July 27 not to operate more than 50 percent of its flights, which were approved for daylight saving time, over an eight-week period.

On July 6, the General Directorate of Civil Aviation (DGCA) issued a just cause notice to SpiceJet following at least eight incidents of technical malfunctions on its aircraft since June 19.

Read More: SpiceJet clears all outstanding principal dues of AAI