In a sign of an imminent recovery, rescued low-cost carrier SpiceJet has cleared all tax dues a day after formally changing ownership with the transfer of Kalanithi Maran’s entire 58.46% stake to Ajay Singh.
Business Standard has learnt that the airline paid the last tranche of Rs 100 crores towards TDS dues on Tuesday, while service tax dues have also been cleared a few weeks back.
The development comes on the same day the airline got its first tranche of investment of Rs 400 crore from Singh, and also offered 1,00,000 seats under a new flash sale starting at Rs 1,699 for tickets booked by February 26th for travel between March 1st and April 20th this year.
“SpiceJet is today fully current on all service tax and TDS dues ... a key step in the revival and resurgence plan. This is a notable and remarkable achievement, especially in the light of some media reports that another rmajor airline has not paid TDS regularly since 2012,” COO Sanjiv Kapoor said in an email to employees.
“Paying our statutory dues that we had fallen behind on as a result of a very difficult couple of years, was an extremely high priority for us. This is the first major step in our settling our payables to various creditors. We have also paid all salaries to our staff, and have started making meaningful payments to our other business partners,” added Kiran Koteshwar, acting CFO in a statement.
The airline, which soon hopes to submit a payment plan to the Airports Authority of India (AAI), has paid Rs 500 crores in tax liabilities since August last year. SpiceJet has about Rs 1,400 crores worth of liabilities, which includes Rs 330 crores due to state-owned AAI, Rs 400 crores to aircraft lessors, besides other dues towards bank loans, maintenance services, etc. It hopes to clear dues as soon as its gets the Rs 1,500 crore in investments promised by investors led by Singh in multiple tranches by April this year.
“Making regular payments to oil companies and airports have prevented the liabilities from rising from the levels seen in December. It will start to go down as payments are made to lessors,” another industry source said.
The airline, which cut daily flights to 200 from about 350 in July last year, now hopes to get back to 280 flights by April as it adds new Boeing B737 aircraft to its current fleet of 17. However, SpiceJet may let go of its unviable 15 Bombardier Q400 aircraft under its revival strategy to have a single fleet type.
The SpiceJet scrip at the BSE closed 0.63% up at Rs 24.15 on Tuesday.
- BS
