Indian Government Try to Save Jobs in SpiceJet Rescue Plan

Airline Messaging Consultancy ServicesThe Indian civil aviation ministry has said that it ‘may request banks to lend up to $94 million’ to the ailing airline, SpiceJet in loans to be guaranteed by Kalanithi Maran, the company chairman, in a bid to try to save jobs without directly placing a burden on the taxpayer.

Aviation consultancy firms can often help airlines to cut the cost of operational messaging and communications, but with 24% aviation fuel tax, the financial burden of flight operations can prove difficult.

With a lack of bankruptcy law, and to prevent the repeat of another Kingfisher Airlines failure, the government is also asking its debtors to give them more time to make payments such as airport fees and fuel costs.

SpiceJet made losses of $49 million in Q3 this year in spite of efforts to cut costs and with a net debt that is almost five times as large, the ailing company may find an investor unwilling to step in unless Mr Maran can put together a rescue plan and fast.

SpiceJet has been stopped from taking advance orders beyond 30 days by the airline regulators, but the government wants this to be removed to offer the airline another chance of climbing out of the financial hole that has been growing steadily larger over the course of the year. Crippling fuel taxes and economic pressure could put an end to the carrier, which would place the Indian aviation industry on very unsteady ground.

The government wants to do whatever it can to save the airline in an effort to protect the staff.

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