SpiceJet: Indian airline planes 'grounded'

India's troubled airline SpiceJet has grounded flights after oil companies refused to refuel any of its planes, reports say.

The debt-ridden carrier owes money to creditors, including oil companies.

SpiceJet is India's fourth-biggest airline by market share.

On Tuesday, civil aviation authorities gave SpiceJet a reprieve when they said state-owned oil companies would be asked to give credit to the cash-strapped airline for up to 15 days.

The civil aviation ministry also said that

banks or other financial institutions would be asked to lend up to $94m (£60m), backed by a personal guarantee of SpiceJet chairman Kalanithi Maran, a well-known media businessman.

The ministry said the measures were aimed at avoiding a collapse which it said would be a "major setback" for the airline industry.

Correspondents say the government hopes to save jobs and prevent a repeat of the high-profile collapse of Kingfisher Airlines which was grounded in 2012.

It is not clear, however, why oil companies have refused to refuel SpiceJet planes after Tuesday's announcements.

"Not even a single flight has taken off this morning due to fuel supply issue with the oil companies," sources in the SpiceJet told the BBC on Wednesday.

SpiceJet has $314m (£200m) in debts and it is looking to raise funds.

The company has been unable to pay its dues to staff, airports, tax authorities and its lenders.

The airline, which has been making losses since last year, is also battling refunds for customers and forced flight cancellations.

It has already cut the size of its fleet by a third since September and cancelled dozens of flights a day for the rest of the year.

BBC Business