AAI puts SpiceJet on cash and carry basis, airline says business as usual

The Airports Authority of India (AAI) has put SpiceJet operations across the country on a "cash and carry basis", presumably due to the carrier's inability to clear airport dues. However, the airline chose to say that it was business as usual for them.

"AAI deferred its decision to put SpiceJet on cash and carry. We continue to have normal operations at all AAI-run airports as before without any impediments," the company spokesperson said.

The AAI order was to be effective from Thursday. In a circular to the airports of Kolkata, Delhi, Guwahati, Chennai and Mumbai, the AAI said: "The competent authority has approved to put the operation of SpiceJet Ltd on cash and carry basis out of all AAI airports with effect from 0001 hours on July 30, 2020."

The circular stated that this decision may be informed to officials of SpiceJet at respective stations and airports to make necessary arrangements to deposit the required amount at the respective stations for day-to-day operations.

The cash and carry format implies that credit facility by the AAI has been withdrawn because SpiceJet could not clear dues and now they have to pay every day to the AAI for airport user fees in order to continue operations. SpiceJet has to pay cash upfront for the use of the airports.

A cash and carry status implies financial stress for the airline and the aviation sector has been reeling under stress since the COVID-19 pandemic grounded most operations.

A similar notice by the AAI had been issued to SpiceJet in December 2014 when the airline was facing a financial crunch and was unable to pay salaries.

In the time of the pandemic, some airlines have resorted to lay offs and pay cuts as airline traffic is nowhere near normal and international flights remain grounded or truncated in most countries.