Volatility in jet fuel prices and forex rates has caused liquidity crunch at low-cost carrier SpiceJet, which caused the airline to request one of its lessors to defer payments of its dues for three months. According to a report published by CRISIL earlier this month, in which it downgraded Ajay Singh-promoted SpiceJet\u2019s bank\u2019s facilities, the company was to receive cash inflows from delivery of new aircraft from August 2018, which got delayed leading to liquidity mismatch.<\/p>\n
\u201cLiquidity has deteriorated over the six months ended September 30, 2018. SpiceJet had unencumbered liquidity of Rs 248 crore at March 31, 2018, which has been largely utilised towards operations as industry faces significant cost pressures as well as for advances towards the new aircraft leases\u2026the company has requested one of its lessor to provide for a relief window of three months. CRISIL will closely monitor SpiceJet\u2019s liquidity and its impact on debt serviceability,\u201d the ratings agency said.<\/p>\n
Confirming the development, a SpiceJet spokesperson said: \u201cThe downgrade is an industry phenomenon and we continue to outperform the industry on financial metrics. However, with regards to one single lessor mentioned in the CRISIL report, we had taken a one-time relief of 2-3 months to better manage cash flows during the lean month of September 2018\u201d. The company did not disclose the name of its aircraft lessor or the amount it was due to pay.<\/p>\n
\u201cAviation turbine fuel prices increased by 10 per cent and Indian rupee depreciated 7.9 per cent over the last three months. ATF is a major cost and accounts for 35-40 per cent of total operating costs while 35-40 per cent of costs (lease and maintenance) are dollar denominated. Despite such a sharp increase, airlines could not increase prices due to intense competition, with the second quarter being inherently weak. Due to stretched liquidity, the company has sought a three-month relief window from its lessor towards payment of leases. Delay in delivery of Boeing 737MAX aircrafts further led to liquidity mismatch as the company was to receive healthy profits on sale and lease back transaction,\u201d CRISIL said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Volatility in jet fuel prices and forex rates has caused liquidity crunch at low-cost carrier SpiceJet, which caused the airline to request one of its lessors to defer payments of its dues for three months. According to a report published by CRISIL earlier this month, in which it downgraded Ajay Singh-promoted SpiceJet\u2019s bank\u2019s facilities, the […]<\/p>\n","protected":false},"author":1,"featured_media":45147,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-45146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/45146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=45146"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/45146\/revisions"}],"predecessor-version":[{"id":45148,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/45146\/revisions\/45148"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/45147"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=45146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=45146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=45146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}