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Budget airlines Spice in deep financial soup, cancels over 1800 flights

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Budget airlines Spice in deep financial soup, cancels over 1800 flights

Low-cost airline SpiceJet, which has been facing a major cash crunch for quite some time, has cancelled over 1,800 flights across the country for the current month, signaling mounting troubles for the budget airline.


The carrier, which is part of Kalanithi Maran-led Sun Group, has cancelled a total of 1,861 flights, a few to Kathmandu in Nepal and all others connecting domestic cities, till December 31, SpiceJet said in an update on its website. These included 81 flights scheduled for Monday.


The large-scale flight cancellations came at a time when the aviation regulator DGCA was considering issuing a show-cause notice to the airline for defying its directives regarding advance bookings.


DGCA has asked the airline to stop taking bookings by tomorrow of more than one month in advance.


Besides, Airports Authority of India (AAI) is said to be considering putting SpiceJet on cash-and-carry mode soon if it does not furnish a bank guarantee against its dues to the airport operator, which stand at around Rs 200 crore.


Concerned over the deteriorating condition of SpiceJet and large-scale flight cancellations, DGCA had on Friday also withdrawn 186 of its slots and asked it to clear salary dues of all its employees within the coming 10 days.


SpiceJet stock has fallen by over 28 per cent in last 5 trading sessions.

Shares of SpiceJet, which tumbled 13 per cent in early trade on Monday amid a flurry of negative news including fund drought and large-scale flight cancellations, closed with a loss of 4.39 per cent at Rs 15.25 apiece.


Union Civil aviation minister Ashok Gajapathi Raju also last week raised serious concern over the financial health of the domestic airline.


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