SpiceJet has no cash to buy even spare parts?

Despite embarking on a ferocious price war with its rivals to lure in more fliers, Indian carrier SpiceJet Ltd has hit a turbulent path for itself as it is cash-strapped even to buy spare parts for its aircraft.

The Kalanithi Maran-backed SpiceJet Ltd recorded its biggest ever loss of Rs 1,003.24 crore last fiscal which was followed by talks of getting funding to sustain the business.

However, things are not going the right way for the once-upon-a-time largest Indian budget carrier as it is reportedly struggling to keep its fleet fit for the skies.

The airlines has resorted to a ‘Christmas Tree’, a term used in the aviation industry for planes that get their parts from other aircraft. And a such a situation comes up only when an airlines is extremely cash strapped.

Internal emails accessed by Mint indicate that SpiceJet is finding it difficult to pay vendors, and this has now started having an impact on its operations.

Mint reports , “A SpiceJet Boeing 737 stands on the apron of Delhi airport, surrounded by mechanics who are systemically harvesting parts of the aircraft to provide spares for other planes in the airline’s fleet.”

SpiceJet has been seen as a potential target by foreign airlines after rules were eased in 2012 to allow foreign carriers to buy up to 49 percent in local airlines.

Meanwhile, probably to up its game against other airlines, SpiceJet has now introduced low fares on certain routes. Some of the tickets are prices as low as Rs 1,499.

And that seems to have helped its business. Business Standard reports “Spice Jet has edged 2.5% higher to Rs 18.30 on the BSE following a promotional offer launched on select routes. The reduction of jet fuel prices also helped sentiment.”