Azernews.Az

By Bloomberg

India’s government will decide as soon as today on the future of SpiceJet Ltd., the budget carrier that has canceled flights and delayed paying staff this month amid concerns it may wind down operations, an official said.

A financial proposal the carrier submitted to the government in a meeting earlier today didn’t give any new information regarding new investors and funds, an official at the Directorate General of Civil Aviation told reporters in New Delhi, asking not to be identified citing departmental rules. All flights were operating normally today, the company said in a statement before presenting the plan to the government.

The meeting is “very crucial” for the company, according to a letter the airline sent to to pilots, a copy of which was obtained from a person with knowledge of the matter. “If all goes well”, then the airline expects to continue operations smoothly and as planned, Sandeep Varma, head of flight operations wrote. The airline’s senior management will brief employees “if all does not go well,” according to the letter.

The situation at SpiceJet, owned by media billionaire Kalanithi Maran, highlights the difficulties of airlines in India, where base fares sometimes as low as 2 U.S. cents have contributed to over $10 billion in loss in the last seven years. Kingfisher Airlines Ltd., started by liquor baron Vijay Mallya, was grounded in 2012 after accumulating $1.4 billion of debt.

SpiceJet shares fell 7.8 percent to 13.55 rupees in Mumbai trading today. The official’s comment came after the close of trading. The shares have declined 23 percent this year.