Kalanithi Maran-owned SpiceJet cut its fleet by about a third in September and will operate 22-24 Boeing planes until at least the middle of 2015, as the loss-making private carrier looks to cut costs.
Chief Operating Officer Sanjiv Kapoor said on Friday that the airline needs fresh capital to end five consecutive quarters of losses. Prior to the September cut, it had been operating 35 planes.
"The decision to shrink is part of our restructuring," Kapoor told Reuters in a telephonic interview.
The airline flew 42 Boeing planes at the end of 2013, and it has cut its daily flights to 275 from 340, the COO said.
SpiceJet, the country's second-largest budget carrier, had said last week it was in early talks with potential investors about an injection of capital. The airline said in May it was in advanced talks with investors for funding but no deal materialised.
Kapoor declined to comment on the state of the talks.
The budget carrier is losing money in a market where competition with rivals GoAir and IndiGo has kept fares low and operating costs remain comparatively high, and the majority of the country's larger carriers are making losses.SpiceJet's scrip ended 13.78 per cent lower at Rs 15.95 a piece in a flat market at the Bombay Stock Exchange on Friday and it has lost a quarter of its value this week.
Kapoor also said that the Airports Authority of India (AAI) had reinstated its credit facility after the private carrier resolved all outstanding issues with the regulatory body.
The airports regulator told SpiceJet this week that it must pay in cash for services like landing, parking and luggage handling every time it flies a plane, which typically happens when an airline owes money beyond a certain threshold.(Reuters)