SpiceJet denies AAI has put it on cash-and-carry mode

Budget passenger carrier SpiceJet Friday refuted allegations that its operations have been placed by the airport operator on cash-and-carry mode.

"Setting the record straight: SpiceJet is not on cash-and-carry with the AAI," the company's chief operating officer Sanjiv Kapoor said on micro-blogging site Twitter.

The development comes amidst reports that the state-run Airports Authority of India (AAI) has placed the airline on a cash-and-carry mode.

Airlines usually pay monthly charges to the airport operators. But under the cash-and-carry mode they have to make daily payments for operations.

In the cash-and-carry mode, the airline has to pay every time it uses various facilities of the airport. This includes the navigation, luggage handling, parking, housing and landing charges of the aircraft as well as the ticketing counters.

The airline recently reported a Rs.310 crore loss in the quarter ended September from Rs.560 crore loss in the corresponding period of last fiscal.

The airline had also reduced its fleet size and is now operating only 26 aircraft from a fleet size of 35 earlier this year.

Even the company's auditors SR Batliboi & Associates have doubted the airline's ability to stay afloat.

Civil Aviation Minister Ashok Gajapathi Raju said Thursday the current business environment is tough for doing aviation business in India and that the current regulations are not helping the sector.

"We have to focus on removing bottlenecks for the sector and make it sustainable again," Raju said, adding that the latest news about the losses made by budget carrier SpiceJet was like getting a 'heart attack'.