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India's cash-strapped spice jet resumes service


New Delhi - Cash-strapped Indian budget carrier Spicejet resumed flights on Wednesday evening after a harrowing day for passengers with a bulk of its scheduled flights cancelled.

More than 100 Spicejet flights were cancelled since Wednesday morning as oil companies refused to provide fuel to the company citing non-payment.

Local television channels showed distraught and angry passengers gathered at airports saying they had received no information of cancellations.

Operations resumed with a skeletal service after the management said it had reached an agreement with oil companies over the supply of fuel, NDTV reported.

"Spicejet apologizes for disruption and pain caused to passengers due to stoppage of fuelling for our flights by the oil companies," chief operating officer Sanjiv Kapoor was quoted as saying.

The carrier was earlier placed on a cash-and-carry mode under which it had to pay immediately for fuel. But it failed to pay cash Tuesday and gradually its aircraft ran out of fuel, NDTV reported.

The Civil Aviation Ministry stepped in late Tuesday asking the state-run oil companies and airport operators to extend a two-week credit facility.

"We are looking at all the pros and cons and the problems the passengers are facing," junior minister for civil aviation, Mahesh Sharma, said.

"We can take measures to help the industry, or passengers, but not one single company," Sharma said.

The airline is estimated to owe the oil companies and airport authorities an estimated 20 billion rupees (314 million dollars).

The ministry had also said it may request Indian banks and financial institutions to extend short-term loans to Spicejet while asking the airline's management to immediately organize a capital infusion.

Owned by Chennai-based Sun Group, Spicejet operates more than 250 flights daily.

Local media have reported that the accumulated losses of India's aviation industry over the last seven years has risen to 8.6 billion dollars.

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