SpiceJet Ltd. has entered into an agreement with the Airports Authority of India and cleared all outstanding principal dues of the airports operator.
"With this, SpiceJet will no longer remain on 'cash and carry' at AAI-run airports and will revert to advance payment mechanism for daily flight operations," according to the airline's statement released on Tuesday. The AAI had in 2020 put the budget airline on a "cash and carry" basis as it was unable to clear its previous dues.
In the "cash and carry" model, the airline has to make daily payments to the AAI for various charges -- navigation, landing, parking, etc. -- to operate flights.
Additionally, AAI will now release SpiceJet's Rs 50 crore bank guarantee as dues stand cleared. This will result in additional liquidity for the airline.
SpiceJet has been making losses for at least last three years -- Rs 316 crore in FY19, Rs 934 crore in FY20, and Rs 998 crore in FY21. Between April and December 2021, it reported a net loss of Rs 1,248 crore, and is yet to post its quarterly results for January-March 2022.
India's aviation regulator, the Directorate General of Civil Aviation, had on July 27 ordered SpiceJet to operate not more than 50% of its flights for eight weeks. That came weeks after it issued a show-cause notice to the airline over at least nine mid-flight technical malfunctions since June 19.
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