New Delhi: In a major relief to the budget carrier SpiceJet, DGCA on Thursday allowed the airline to accept advance bookings beyond March 31 even as the government gave initial nod to its revival plan, which has now been referred to market regulator Sebi to examine whether the funding by the new promoters requires open offer.
The airline's Chief Operating Officer Sanjiv Kapoor said that the Directorate General of Civil Aviation's decision would "aid cash flow and the revival process". DGCA had earlier restricted SpiceJet to take advance bookings only up to March 31, following financial crisis in the airline, which led to cancellation of its flights in large numbers and curtailment of operations.
The summer schedule of the airlines in India commences from March 29 and lasts up to October end. Last week, SpiceJet board had approved a proposal that promoter Kalanithi Maran would transfer ownership, management and control of the airline to original founder Ajay Singh as part of plans to revive the ailing carrier.
The airline also submitted a "scheme of reconstruction and revival" for the takeover of ownership, management and control of the airline by the new promoters to the Civil Aviation Ministry for its approval.
"The Ministry has given its initial go ahead to the plan, and it has now been referred to Security and Exchange Board of India (Sebi) to examine whether the Rs 1,500 crore capitalisation by the new promoters in the airline triggers an open offer," official sources said. The approval has been accorded in line with the foreign direct investment cap for the sector, they said.
As part of this plan, the new promoters may acquire up to 58 per cent in the airline. According to the revival plan, a section of its employees will be on "furlough" now and may be taken back once its decides to scale up the aircraft fleet, the sources said, adding, "The new promoters have plans to increase the Boeing fleet size to 26 aircraft from 19 at present immediately after the takeover process gets completed."
Talking to reporters on the sidelines of an industry meeting here, Kapoor said the start of bookings, which was capped earlier till March 31, would "aid cash flow and the revival process".
He also expressed confidence that the issue with the lessors, who have sought DGCA's permission to take back 11 leased Boeing planes, would be "resolved soon, adding that "the problem with lessors is an old one."
Maintaining that the company was working on "a new operations plan," Kapoor said that SpiceJet was also planning to expand its fleet size soon. The strategy of the airline, which also operates about 1587-seater Bombardier Q-400 jets, was also being "discussed with the new promoters", he said.
Regarding its mounting dues to airport operators, he said the airline has "spoken to airports to allow us to operate until fresh funds come in". He said almost 70 per cent of the airline staffers have been paid the December salary.
Kapoor said the staff strength could be reduced in the coming days but "we will do so as fairly as possible," indicating that all dues of the employees would be cleared if they are sent on furlough.
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