SpiceJet Clears All Outstanding Principal Dues Of AAI, Now Out Of ‘Cash And Carry’ Arrangement

SpiceJet said its ability to clear the pending dues reflects the airline's improved cash flow in recent times.

Written by: India.com Business Desk Edited by: Manmath Nayak

Published: August 2, 2022, 3:38 PM IST

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https://www.india.com/business/spicejet-clears-all-outstanding-principal-dues-of-aai-now-out-of-cash-and-carry-arrangement-5549147/ Copy

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New Delhi: SpiceJet on Tuesday said it has cleared all outstanding principal dues of the airport operator and has entered into a full and final settlement with the Airports Authority of India (AAI). With this, SpiceJet said it will no longer remain on ‘cash and carry’ at AAI-run airports across the country and revert to advance payment mechanism for daily flight operations.

“SpiceJet has entered into final settlement with AAI and has cleared all outstanding principal dues of airport operator. It will no longer remain on ‘cash & carry’ at AAI run airports across the country & will revert to advance payment mechanism for daily flight operations,” the airline said in a statement.

SpiceJet has entered into final settlement with AAI & has cleared all outstanding principal dues of airport operator. It will no longer remain on ‘cash & carry’ at AAI run airports across the country & will revert to advance payment mechanism for daily flight operations: SpiceJet pic.twitter.com/FiDFrJwdNj

— ANI (@ANI) August 2, 2022

SpiceJet said its ability to clear the pending dues reflects the airline’s improved cash flow in recent times.

“In another big boost for the airline, AAI will release SpiceJet’s Rs 50 crore bank guarantee following the airline clearing all its principal dues. This will result in additional liquidity for the airline,” the airline added.

The Centre-run AAI had in 2020 put SpiceJet on a ‘cash and carry’ basis as the carrier 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, and others — to operate flights.

Notably, SpiceJet has been making losses for the last four years. It incurred net losses of Rs 316 crore, Rs 934 crore, and Rs 998 crore in 2018-19, 2019-20, and 2020-21, respectively.

In the April-December period of 2021, the airline posted a net loss of Rs 1,248 crore. The airline is yet to declare results for the January-March period of 2022.

Aviation regulator DGCA had on July 27 ordered SpiceJet to operate not more than 50 per cent of its flights, which were approved for the summer schedule, for a period of eight weeks.

On July 6, the Directorate General of Civil Aviation (DGCA) had issued a show-cause notice to SpiceJet following at least eight incidents of technical malfunction in its aircraft since June 19.