Troubled airline SpiceJet once again missed paying salaries to its staff – pilots, cabin crew and ground staff -- against the seventh of every month deadline set by the Directorate General of Civil Aviation (DGCA).
The cash starved airline informed senior employees that it will pay December salaries by 10 January for cabin crew and ground staff, and by 20 January to its pilots.
However, sources from within the airline reaffirmed that no disruptions are expected for the month. On 16 and 17 December 2014, the airline had to cancel a bulk of its flights after the oil companies declined to supply fuel, citing unpaid bills.
The government, worried about the loss-making industry, had to step in to ask the airport operators and fuel suppliers to extend repayment duration.
The DGCA had earlier limited the airline to source business for a period of only 30 days in advance. Later, it has allowed the airline to take bookings up to 31 March.
As working capital dried up, the Sun Group-owned airline has been unable to pay salaries on time, which prompted the DGCA to ask the airline to clear salaries for all staff members by the seventh of every month, reported Financial Express.
A spokesperson for the airline declined to comment.
Cash Crunch
Since October, the airline has been facing a serious cash crunch, managing to continue operations by means of cash flow generated on future operations. With the Marans unwilling to fund the airline anymore, its former founder Ajay Singh came forward, backed by a consortium of PE funds, to take over the airline.
Details about a possible buy back is sketchy, with the airline hoping that the government will not allow it to flounder.
The airline scrip was trading at ╣16.50, up by ╣0.30 or 1.85% at 10.35 am.
