SpiceJet clears all dues with Airports Authority of India, shares rise

A SpiceJet passenger Boeing 737-800 aircraft takes off from Sardar Vallabhbhai Patel international airport in Ahmedabad, India May 19, 2016. REUTERS/Amit Dave/File Photo

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BENGALURU, Aug 2 (Reuters) – Indian low-cost carrier SpiceJet Ltd (SPJT.NS) said on Tuesday it had cleared all its outstanding principal dues with the state-run airport operator Airports Authority of India (AAI), sending its shares up nearly 5%.

The airline will revert to advance payment mechanism for its daily operations, and AAI will release a 500 million rupees ($6.33 million) bank guarantee, the company added.

The airline has been under the spotlight lately after a slew of incidents of technical snags on its flights and one of its Dubai-based lessors asked the regulator to deregister three of SpiceJet’s planes.

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Adding to its woes, the aviation regulator last week ordered the airline to slash its approved fleet to 50% this summer for eight weeks citing safety snags. The airline said on Monday its flight operations remained normal. read more

Shares rose as much as 4.5% to 42 rupees in early trade.

($1 = 78.9525 Indian rupees)

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Reporting by Tanvi Mehta and Meenakshi Maidas in Bengaluru; Editing by Rashmi Aich

Our Standards: The Thomson Reuters Trust Principles.

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