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After AAI puts SpiceJet on cash-and-carry basis, airline says decision deferred

The airline said it continues to have normal operations at all airports run by AAI

July 30, 2020 / 11:20 PM IST
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Low cost carrier SpiceJet has reiterated that it continues to have 'normal operations' at all airports run by Airports Authority of India (AAI), after it emerged that the government agency had put the airline on cash and carry basis.

AAI had passed an order on July 29, stating, "Competent authority has approved to put the operation of SpiceJet on a cash and carry basis out of all AAI airports, w.e.f 001 hours of 30th July 2020."

It added:

"The same may also be informed to the concerned officials of SpiceJet at respective stations/airports/regions to make necessary arrangement to deposit the required amount at the respective stations for day to day operation."

Moneycontrol has seen a copy of the notice.

In a cash and carry basis, the airline has to pay, on a daily basis, for using facilities provided in an airport. Usually, airlines make these payments monthly.

These facilities include parking of aircraft, landing and luggage handling.

But a SpiceJet spokesperson told Moneycontrol that AAI has deferred the decision. “AAI deferred its decision to put SpiceJet on cash and carry. We continue to have normal operations at all AAI-run airports as before without any impediments," the spokesperson said.

The development comes a day after the airline announced a consolidated net loss of Rs 816.2 crore for Q4 FY20 against a profit of Rs 72.5 crore in the corresponding quarter of the preceding financial year. The airline's negative net worth also zoomed to Rs 1,579 crore in FY20, prompting its auditor to note that there is "existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern."
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Jul 30, 2020 11:20 pm