From ₹14 to ₹21 and back to ₹15, the stock of cash-strapped airline SpiceJet has taken a quick u-turn in the past 11 trading sessions. The initial cheer was thanks to two reasons. One, the rout of crude oil resulted in a sharp drop in the price of aviation turbine fuel. Next, investor Rakesh Jhunjhunwala picking up 1.4 per cent stake in the company boosted sentiment. But the optimism dissipated soon. First, news that SpiceJet had delayed employee salaries took some wind out of the stock.

Next, reports that airline has been put on cash-and-carry mode by the Airports Authority of India took a toll; the airline’s management says it’s back on credit terms now. Finally, the squeeze by the aviation regulator DGCA on Friday shaved off 14 per cent from the stock.

Taking note of its large-scale flight cancellations, the regulator has ordered SpiceJet to come up with a payment schedule for its dues, refund fares for cancelled flights within a month, and not book flights beyond a month in advance. This will further strain the airline’s precarious financial position. SpiceJet had posted record losses in 2013-14 and despite improvements, remained in the red in the first half of this year. Its net worth has been eroded and debt exceeds ₹1,500 crore. Competition is set to intensify. To ride out the turbulence, SpiceJet needs fund infusion, and fast.

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