With oil firms refusing to provide much needed fuel to aircraft run by the cash-strapped budget carrier SpiceJet, the latter decided on Wednesday to ground all of its flights till such time as the fuel is supplied.
SpiceJet is staring at a financial collapse after its efforts to find an investor failed. It needs an immediate infusion of about Rs. 2,000 crore to survive.
State-run oil marketing firms are yet to decide on resuming jet fuel supply to SpiceJet on a two-weeks credit facility.
On Tuesday, the civil aviation ministry said it will request the oil companies and the airport operators to extend a 15-day credit facility to SpiceJet in a bid to save the airline from shutting down.
The ministry also said that banks and financial institutions would be asked to extend loans of upto Rs. 600 crore to the airline as part of measures to keep the carrier functional.
It said that the finance ministry would be asked to permit external commercial borrowing (ECB) for working capital as special dispensation.
The measures, however, comes with a rider that the beleaguered airline will commit capital infusion at the earliest.