November 29, 2018 / 4:22 AM / 10 months ago

SpiceJet shares rise; gives additional bank guarantee to airport operator

A SpiceJet passenger aircraft taxis on the runway at the airport next to a slum area in Mumbai December 19, 2014. REUTERS/Shailesh Andrade/File Photo

NEW DELHI (Reuters) - Shares of SpiceJet Ltd rose as much as 2.8 percent on Thursday after the low-cost carrier said it has provided an additional bank guarantee of 200 million rupees ($2.83 million) to state-owned Airports Authority of India for unpaid dues.

SpiceJet owes the airport operator 1.17 billion rupees in unpaid dues for landing, parking and other airport charges, according to media reports, against an existing bank guarantee of 1.04 billion rupees.

The additional bank guarantee was given on Wednesday, said an airline official who did not wished to be named.

High crude oil prices, a weaker rupee and intense fare wars are hurting airlines’ profitability in India with some carriers struggling to stay afloat.

India’s leading full-service carrier Jet Airways Ltd is cutting costs and trimming flights on some routes to stem losses. It is also looking to raise money by monetising its assets, including selling a stake in its frequent flyer program.

Earlier this week IndiGo, India’s leading low-cost carrier, said it will charge passengers for pre-selection of all seats on the aircraft when they check in online. However, there is no charge for web check-in if the passenger does not select a seat.

($1 = 70.6300 Indian rupees)

Reporting by Aditi Shah; Editing by Rashmi Aich

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