Monday, 8 December 2014 00:00
-
- {{hitsCtrl.values.hits}}
Reuters: SpiceJet Ltd cut its fleet by about a third in September and will operate 22-24 Boeing planes until at least the middle of next year, its chief operating officer said, as the loss-making budget carrier looks to cut costs.
SpiceJet says it needs fresh capital to end five consecutive quarters of losses. Prior to the September cut, it had been operating 35 planes.
“The decision to shrink is part of our restructuring,” Sanjiv Kapoor told Reuters in a telephone interview on Friday.
The airline flew 42 Boeing planes at the end of last year, and it has cut its daily flights to 275 from 340, he said.
Kapoor also said that the Airports Authority of India had reinstated its credit facility after the airline resolved all outstanding issues with the regulatory body.
The airports regulator told SpiceJet this week that it must pay in cash for services like landing, parking and luggage handling every time it flies a plane, which typically happens when an airline owes it money beyond a certain threshold.
SpiceJet stock was down 14.6% at 3:07 p.m. in a flat market, and it has lost a quarter of its value this week.
India’s second-biggest budget carrier said last week it was in early talks with potential investors about an injection of capital. The airline said in May it was in advanced talks with investors for funding but no deal materialised.
Kapoor declined to comment on the state of the talks.
SpiceJet is losing money in a market where competition with rivals GoAir and IndiGo has kept fares low and operating costs remain comparatively high, and the majority of India’s larger carriers are loss-making.
