SpiceJet’s plans of garnering working capital by issuing tickets for flights up to March 31 — which was allowed by the government on December 16 — may not materialise as expected with customers flying during this period continuing to prefer other airlines over the beleaguered low-cost carrier.
The Kalanithi Maran-owned airline has been banking heavily on sale of tickets for this period to be able to meet financial obligations, such as payments to OMCs that supply jet fuel and the Airport Authority of India (AAI).
But given the recent spate of flight cancellations on SpiceJet’s network and uncertainty about the airline’s future, customers who don’t have plans to fly immediately are looking at other airlines, such as IndiGo and Go Air, travel agents say.
“Looking at the current scenario, travelers as well as travel agents are avoiding booking seats on SpiceJet. It is not feasible for travel agents to book seats with the airline with so much uncertainty about its future,”said Iqbal Mulla, chairman and managing director of Treasure Tourism Corporation and Citizen World Travel, two Mumbai-based travel agencies. “We are seeing an over 50% fall in bookings at SpiceJet since the airline cancelled its flights on Wednesday.”
A senior executive with an online travel portal, speaking on the condition of anonymity, confirmed that the airline has seen bookings fall by over 50% since December 17.
To be sure, passengers who need to travel immediately have been availing SpiceJet flights, after the carrier resumed full-fledged operations on Thursday.
“On Thursday, travelers opting for SpiceJet mostly purchased spot tickets for flights scheduled within the next 24 hours. Those who are making advance booking preferred other airlines over SpiceJet,” said Jay Bhatia, director of Tulsidas Khimji Holidays, a Mumbai-based travel agency and co-chairman of the airlines council at Travel Agent Assosiation of India (TAAI).
On December 17, SpiceJet operated only 75 flights — commencing operations only after 4:00pm, after it paid around Rs 3 crore to oil retailers. An airline’s spokesperson said on Thursday morning that all its flights for the day were on schedule.
But SpiceJet is not out of the woods yet. The government said on December 16 that the airline would need to find an investor in the next eight weeks, till which time it has urged stakeholders to go easy on the airline.
On December 17, SpiceJet’s management said it could maintain normal operations if banks lend an additional Rs600 crore to it. The credit provided by the banks, along with the fall in the cost of jet fuel in recent months, could help the airline turnaround operations. However, bankers have been so far unwilling to give the carrier further loans despite a personal guarantee from promoter Kalanithi Maran, chairman of the Sun Group.
However, some travel agents remain optimistic on SpiceJet’s future. Sharat Dhall, president of Yatra.com, said that he was confident of bookings for SpiceJet flights picking up if the carrier can maintain normal operations, which started on Thursday, for a while.