SpiceJet Airlines plans to cut 1,400 jobs, about 15% of its workforce, amid financial challenges, confirming the move to The Economic Times. The airline, seeking a Rs 2,200 crore fund infusion, faces delays in salary payments and an imposed Rs 30 lakh fine by the DGCA for insufficiently rostering pilots during low-visibility landings (SpiceJet Job Cut).
SpiceJet Airlines is set to downsize its workforce by 1,400 employees, constituting nearly 15% of its total staff, as part of cost-cutting measures aimed at sustaining investor interest amidst ongoing financial challenges.
The cash-strapped budget airline confirmed the news with the Economic Times, citing the necessity for aligning companywide costs with operational requirements as the rationale behind the staff reductions.
Currently employing 9,000 personnel and operating around 30 aircraft, including eight under wet lease from foreign carriers, the airline faces a salary bill of Rs 60 crore.
This financial burden has prompted the need for streamlining the workforce (SpiceJet Job Cut). Reports suggest that salary payments have been delayed for several months, leaving numerous employees awaiting their January remuneration.
The airline is actively seeking a fund infusion of Rs 2,200 crore, but according to The Economic Times (ET), investor concerns may be hindering the capitalization process.
Despite this challenge, the airline expresses confidence in the ongoing funding initiatives, stating that progress is on track, and the majority of investors are supportive.
At its peak in 2019, SpiceJet boasted a fleet of 118 planes, employed approximately 16,000 personnel, and held a domestic market share of 16.3% in October 2019 (SpiceJet Job Cut). Operating 516 daily flights, the airline served 51 domestic and nine international destinations.
SpiceJet’s financial challenges include an arbitral award issued in 2018 to former promoter Kalanithi Maran and KAL Airways. Last year, SpiceJet informed the Delhi High Court that it was “struggling to stay afloat” after being directed to make this payment (SpiceJet Job Cut).
In the preceding month, the Directorate General of Civil Aviation (DGCA) imposed a fine of Rs 30 lakh on the low-cost airline, as well as Air India.
The penalty was attributed to their failure to roster an adequate number of pilots trained for low-visibility (CAT-III) landings during the fog season.
