SpiceJet board meet today: Will Marans pump in more money into airline?
Will the promoters, the Marans, decide to pump in more money into the cash-strapped airline? Or will they announce the status of talks with any potential investor? Because if neither decision is taken, then it only means the Marans will let the airline struggle with mounting dues, exhortations from multiple lenders and dwindling prospects of any revival.
A crucial meeting of the board of directors of SpiceJet is scheduled for today at the airline's Chennai office. Will the promoters, the Marans, decide to pump in more money into the cash-strapped airline? Or will they announce the status of talks with any potential investor? Because if neither decision is taken, then it only means the Marans will let the airline struggle with mounting dues, exhortations from multiple lenders and dwindling prospects of any revival.
SpiceJet is in deep financial trouble and as global aviation consultancy CAPA has said many times, needs Rs 1500 crore immediately to survive. The Marans are majority shareholders in SpiceJet and if they think the business model of this LCC is viable and sustainable in the long run, nothing should prevent them from pumping in more money.
Alternatively, they ought to have been able to convince a potential buyer of SpiceJet's merits by now.
Civil Aviation Minister A Gajapathi Raju told Firstbiz on Saturday that airline officials had met him in the first week of December and assured him that an investor will be finalised within six weeks. If this is true, the airline still needs money to survive these six crucial weeks.
Or else the airline is staring at a bleak future. According to multiple sources, it has dues of about Rs 1500 crore to various stakeholders, aircraft lessors want to take back more aircraft because they have no faith in the airline's ability to pay up lease rentals, November salaries of some employees have still not been paid and now the airline has been restrained from taking advance bookings beyond a month.
SpiceJet COO Sanjiv Kapoor has said in media interview over the weekend that advance bookings account for a third of the airline's revenues and stopping these would harm it. When asked about the impact of stopping advance bookings on SpiceJet's books, Raju had told us "their revenues are already impacted, which is why there is a concern on safety (for SpiceJet flights)......". Kapoor has already said there was no question of compromising on safety but the moot point is how will the airline revive if no promoter funding comes in and revenues from even advance bookings dry up?
SpiceJet has refuted allegations about its operations at various points. It has said dues to various stakeholders are significantly below the Rs 1500 mark, denied that its fleet of Boeing 737 aircraft will reduce beyond the 22 aircraft it has now, denied any pressure from lenders to pay up interest costs of the Bombardier Q400 aircraft and vowed to speak to the DGCA about banning advance bookings beyond a month.
But these denials do not take anything away from the fact that unless money comes in - whether the Marans invest or get someone else to take the risk - SpiceJet may not survive. A source indicated yesterday that of the 200 commanders and 170 co-pilots on the Boeing fleet, 15 pilots have already resigned and more resignations are on the way. We had earlier reported that the airline is shutting down operations to many stations - some overseas too - on fleet reduction. Today, COO Sanjiv Kapoor has said in an interview to two separate newspapers that operations to some stations will be discontinued though he has not specified which stations.
Sources also say that EDC - Export Development Canada - which is believed to have advanced loans for SpiceJet to buy the Bombardier aircraft (it has 15 Q400 aircraft) - is worried about the airline's ability to pay interest costs and that officials from the Canadian High Commission in Delhi met the DGCA on Friday. This could not be independently confirmed though.
SpiceJet has already taken some wise steps like reducing operations so that there is less chance of cancelling flights at the last moment. Its total flights are now down by about a 100 from September.This week could be crucial for SpiceJet's future for many reasons. First, today's meeting should set the course for near term in terms of funding. Second, the airline has to give a status report to the regulator about making payments to stakeholders and clearing salary arrears. Third, the Airports Authority of India could pull the plug and allow the airline less than a week of moratorium to pay dues. Fourth, it has to clear refunds to passengers of cancelled flights within a specified time limit. And fifth, it must now be able to generate adequate aircraft loads - which means enough occupied seats per aircraft - to avoid running loss making flights.
BSEB Class 10 result expected today; check alternative websites if biharboardonline.bihar.gov.in is unresponsive
BSEB conducted the Class 10 exams in 1,525 centres across the state from 17 to 24 February, in which around 17 lakh students had appeared
The company's revenue from operations rose by 3.4 percent to Rs 16,245.4 crore in the reported quarter from Rs 15,711 crore in the same period last fiscal
A total of 16.8 lakh candidates who have enrolled for the class 10 exam can check the result through the website-biharboardonline.com