India

SpiceJet: Indian airline resumes flights

Passengers wait in front of SpiceJet airlines ticket counter at the domestic airport, to get refunds and status about the cancelled flights, in Mumbai, India, 17 december 2014 Image copyright EPA
Image caption Flight cancellations left thousand of angry travellers stranded at airports across the country

India's troubled airline SpiceJet has resumed flights after it agreed to pay oil companies cash for fuel purchases.

The fleet of the debt-ridden carrier, which owes money to creditors, including oil companies, was grounded for several hours on Wednesday.

The cancellations left thousand of angry travellers stranded at airports across the country.

SpiceJet, India's fourth-biggest airline by market share, has $314m (£200m) in debts.

The company has been unable to pay its dues to staff, airports, tax authorities and its lenders.

"We have resumed operations [from Wednesday evening]. We paid [oil companies] in cash at some airports," news agency AFP quoted a source in SpiceJet as saying.

The airline cancelled nearly 1,900 flights last week and on Wednesday, it did not operate more than 150 of the 243 scheduled flights, reports said.

On Tuesday, civil aviation authorities gave SpiceJet a reprieve when they asked state-owned oil companies to give credit to the cash-strapped airline for up to 15 days.

The civil aviation ministry also said that banks or other financial institutions would be asked to lend up to $94m (£60m), backed by a personal guarantee of SpiceJet chairman Kalanithi Maran, a well-known media businessman.

The ministry said the measures were aimed at avoiding a collapse which it said would be a "major setback" for the airline industry.

Correspondents say the government hopes to save jobs and prevent a repeat of the high-profile collapse of Kingfisher Airlines which was grounded in 2012.

SpiceJet has been making losses since last year.

It has already cut the size of its fleet by a third since September and cancelled dozens of flights a day for the rest of the year.

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