Shares of SpiceJet rose, as much as 2.8 per cent today after the low-cost carrier said it has provided an additional bank guarantee of Rs. 20 crore ($2.83 million) to state-owned Airports Authority of India for unpaid dues.
SpiceJet owes the airport operator Rs. 117 crore in unpaid dues for landing, parking and other airport charges, according to reports, against an existing bank guarantee of Rs. 104 crore.
The additional bank guarantee was given on Wednesday, said an airline official who did not wished to be named.
High crude oil prices, a weaker rupee and intense fare wars are hurting airlines’ profitability with some carriers struggling to stay afloat.
The country’s leading full-service carrier Jet Airways is cutting costs and trimming flights on some routes to stem losses. It is also looking to raise money by monetising its assets, including selling a stake in its frequent flyer program.
Earlier this week IndiGo, the country’s leading low-cost carrier, said it will charge passengers for pre-selection of all seats on the aircraft when they check in online. However, there is no charge for web check-in if the passenger does not select a seat.>