Don't take bookings for one month, SpiceJet told

Financially strained SpiceJet on Friday found itself in more trouble with Directorate General of Civil Aviation (DGCA) asking it not to take bookings of flights over one month and withdrawing 186 of its slots.

The DGCA also directed the low-cost airline to clear salary dues of all its employees in the next ten days and to file a “convincing schedule” by December 15 to clear its over Rs 1,500 crore dues to airports and oil companies.

These actions came after the DGCA reviewed the functioning of SpiceJet, which had been facing financial problems, after it restructured the flight operations in the past few months.

With the airline reducing flights from 339 per week in September to 232 flights in October, the DGCA instructed the airline not to take bookings of flights over one month and refund the booking amount to the customers of cancelled flights in 30 days.
Following this, it also decided to withdraw 93 each of arrival and departure slots allotted to the airline at various airports.

The DGCA has now put the airline on “heightened” surveillance on landing to ensure that safety is not compromised due to its financial troubles.

The regulator also intervened that there was delay in salary disbursal. It asked SpiceJet to clear salary dues by December 15. It also directed the airline to disburse the salaries now on by seventh of every month. Airline officials said that 85 per cent of the staffers were paid their salary already.

The airline had witnessed the resignation of 125 pilots over a period of time and the DGCA had asked SpiceJet to ensure that the Flight Duty Time Limitation (FDTL) was not violated even if the airline was facing a pilots’ crunch.

The airline has reported fifth straight quarter of net losses for the July-September period, at Rs 310 crore.

Last month, SpiceJet Chief Operating Officer Sanjiv Kapoor said that it was not correct to compare them with the now-defunct airline after he was asked whether the airline would go the Kingfisher Airlines way.

“We are paying salaries on time. All our tax issues have been cleared and we have among the highest load factors and enjoy a very good market share. Our revenues are $1 billion and market capitalisation is $140 million,” he had said.

Fleet reduction

SpiceJet on Friday cut its fleet by about a third in September and will operate 22-24 Boeing planes until at least the middle of next year, Kapoor 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,” Kapoor said in a telephonic 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.