India Says SpiceJet in Default on Airport Authority Paymentsby
Aviation minister says airline owes 1.6 billion rupees
SpiceJet says it hasn't defaulted since January 2015
India’s government said SpiceJet Ltd. is in default on 1.6 billion rupees ($24 million) owed to the Airports Authority of India, prompting a response from the budget carrier that it hasn’t skipped any payments since January.
Credit-based payment options for airport use were scrapped for the airline after the default, according to Junior Aviation Minister Mahesh Sharma’s written reply to a question Thursday in parliament in New Delhi. SpiceJet said it’s been paying the authority regularly this year on agreed terms.
The shares reversed earlier losses exacerbated by the government’s statement to close up 2.1 percent at 67.10 rupees in Mumbai. The stock has surged about 290 percent this year after the carrier recovered from a cash squeeze and near-collapse in 2014.
Co-founder Ajay Singh bailed out India’s second-biggest budget carrier and the company has posted three straight quarters of profit, helped by a slump in crude oil that made jet fuel cheaper. SpiceJet is seeking shareholder approval to raise as much as 50 billion rupees in loans as it looks to order more than 150 planes.