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There is something about Indian governments and their love for bailing out airlines in trouble, as was evident in the case of Kingfisher, Air India and now SpiceJet
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There is something about governments in India and their love for bailing out airlines in trouble. Kingfisher was thrown a lifejacket; Air India continues to be a recipient of government largesse. SpiceJet is the latest entrant to this club.
Trouble has been brewing for the airline for some time. Fuel companies and airports put SpiceJet on cash-and-carry mode for goods and services needed to run operations—a clear sign of the rising risk of doing business with the airline.
In the middle of all this, the government has asked banks, presumably the ones it owns, and fuel companies to help SpiceJet.
There are no grounds—none that are economic—for this step. If a company is in financial trouble, it is its own problem to sort out and not that of the government. Any argument, such as the interest of flyers and stakeholders, is specious. By that yardstick, all private firms facing difficulties should be helped. Why give special treatment to an airline?
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