Cash-strapped airline SpiceJet Ltd has extended its flight cancellations till 31 January even as state-run Airports Authority of India (AAI) demanded a 200 crore deposit by Wednesday.

Following the decision to cut its fleet size by a third, SpiceJet had cancelled over 1,800 flights till 31 December. According to its website, most of these flights’ cancellation has been extended to 31 January.

On Tuesday, AAI asked billionaire Kalanithi Maran-promoted airline to deposit 200 crore by 31 December, failing which its credit line will be withdrawn.

“We had given a breather till 31 December. We would be putting SpiceJet into cash-and-carry mode. Any relaxation on this condition would be based on specific direction from the ministry of civil aviation," a government official said, requesting anonymity.

He said SpiceJet has given a bank guarantee of 82.5 crore of its total dues, he said.

SpiceJet declined to comment.

India’s second largest low-fare airline had delayed employees’ salaries last month and briefly grounded its fleet in December for want of cash.

The no-frill carrier’s dues to foreign and Indian vendors, airport operators and oil companies had grown from 990 crore to 1,230 crore between 24 November and 10 December, according to data provided by the airline to the aviation ministry. The airline’s dues to foreign vendors, including aircraft lessors and maintenance facilities, had risen from 624 crore to 742 crore in the same period.

On 5 December, the aviation ministry asked SpiceJet, which was raising some of its working capital through advance ticket sales, to stop sales of tickets more than a month in advance. That restriction came after the airline cancelled around 1,800 flights in December after it shrank its fleet, largely owing to financial reasons.

This, along with reports of unpaid salaries, prompted the aviation regulator Directorate General of Civil Aviation (DGCA) to act quickly to prevent a repeat of what happened with Kingfisher Airlines Ltd, the debt-laden airline that was grounded in 2012. Still, the restriction on advance sales precipitated a crisis by drying up the airline’s source of funds.

On 16 December, SpiceJet had to briefly ground its fleet for more than 10 hours after oil companies refused to fuel aircraft until it pays its dues. The aviation ministry has since permitted SpiceJet to accept bookings till March-end and asked banks to give it short-term working capital loans. SpiceJet made a loss of 245.6 crore, excluding one-off expenses, in the three months ended 30 September, down from 559.5 crore in the year-ago period.

On Tuesday, aviation minister Ashok Gajapathi Raju said SpiceJet will have to address its issues on it own.

“The government is here to be helpful and the government can be helpful but the SpiceJet problem is its finances which it will have to sort out," he told reporters.

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