SpiceJet rescue no fix for India's aviation woes

Hong Kong

SPICEJET'S woes are all too familiar. India is cajoling banks to lend to the country's second largest single-brand carrier when the debt-ridden airline needs more equity. The government's hope is to save jobs and prevent a repeat of the embarrassing high-profile failure of Kingfisher Airlines which was grounded in 2012. Even if the rescue works, exorbitant fuel taxes and the lack of a bankruptcy law will keep the industry stuck in an air pocket.

The government is doing what it can to keep SpiceJet flying without directly putting taxpayers on the hook. The Civil Aviation Ministry said on Dec 16 that it may "request" banks to lend up to US$94 million to the carrier in loans guaranteed by the company's chairman, Kalanithi Maran.