Cash-strapped budget carrier SpiceJet was given 10 days interim relief by the civil aviation ministry Tuesday, as its promoters were told to infuse fresh equity.
According to senior ministry officials, a period of 10 days has been given to SpiceJet to get funding, after which the government might consider its plea for further relief.
The decision comes a day after the company submitted an operations plan for safety and financial revival to the industry regulator.
The company's top management had also met Civil Aviation Minister Ashok Gajapati Raju Pusapati and his deputy Minister of State for Civil Aviation Mahesh Sharma Monday for relief.
The airline has been asking for more time from oil companies and airport operators to pay their dues.
Meanwhile, the scrip of the beleaguered airline which had crashed by eight percent on the Bombay Stock exchange (BSE) Monday, gained some traction and closed 0.33 points or 2.58 percent up at Rs.13.90 per equity.
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The industry regulator had given the airline time till Monday to come up with an operation plan keeping in mind the safety aspect while the passenger carrier suffered from financial strain.
The DGCA wanted the airline to furnish data regarding bookings and its plans to operate a truncated fleet. However, according to sources, the new plan submitted to the regulator does not provide any new information.
Earlier, the DGCA had also taken into account the number of allocated flying slots given to the airline and directed it to make immediate refunds on cancelled flights.
The aviation regulator had cracked the whip on the airline after it said that as part of its cost-cutting initiative it would only operate 22-24 aircraft, down from 35 planes which were in service till two months ago.
The volatility in the airline's scrip comes amidst indications that the budget carrier is facing a financial meltdown and will not be able to continue operations due to an exodus of pilots and mounting debts.
The airline recently reported a Rs.310 crore loss for the quarter ended September, down from the Rs.560 crore loss in the corresponding period of last fiscal.
It has a debt of about Rs.2,000 crore, out of which Rs.1,600 crore has to be paid to vendors such as oil companies and airport operators.
The airline had also reduced its fleet size and is now operating only 26 aircraft from 35 earlier this year.
Even the company's auditors SR Batliboi & Associates have doubted the airline's ability to stay afloat.