Government allows SpiceJet to offer tickets until March 31 next year

The Central government has allowed SpiceJet to offer tickets till March 31, 2015, according to media reports. 

Earlier this month, the company was forbidden from offering tickets beyond a month. However, despite the new order, doubts remain whether the airline can survive unless it is able to raise capital for operational expenses. The company’s problems surfaced last month after it sharply reduced the number of flights and returned some aircraft. 

It owes money to several stakeholders - airport authorities, employees, vendors and the government. Though the SpiceJet management met DGCA officials on Monday, it was not able to offer a solution on repayment to vendors. Also, there has been no fresh proposal by the Spicejet promoters - the Marans - to pump in money.

Several experts believe the only way to save the airline would be to pump in fresh capital, which means that the government will have to infuse the additional funding, given the reluctance of SpiceJet promoters to do so. But it is not clear whether the government will be ready to bail out the airline. The airline needs around 1800 to 2200 crores to stay afloat.