Cash-strapped SpiceJet will lay off around 1400 employees, accounting for nearly 15% of its existing workforce, with the move aimed at cutting costs and to retain investor interest.
This decision comes amidst ongoing financial challenges faced by the budget airline, aiming to sustain investor interest and align companywide costs with operational requirements.
"This is to ensure an alignment of companywide costs as against operational requirements,” a SpiceJet spokesperson said.
Currently, the airline employs around 9,000 personnel and operates approximately 30 aircrafts, including eight on wet lease from foreign carriers.
The airline's salary bill, amounting to Rs 60 crore, has posed a significant financial burden, with reports indicating overdue salary payments for several months, leaving many employees awaiting their January remuneration.
Efforts to secure a fund infusion of Rs 2,200 crore have been ongoing, yet investor apprehension may be impeding the capitalization process. Despite these challenges, SpiceJet remains optimistic about fund procurement, asserting that funding initiatives are progressing as planned, with the majority of investors onboard.
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 per cent in October of that year. The airline operated 516 daily flights, serving 51 domestic and nine international destinations.
However, financial woes have plagued SpiceJet, including an arbitral award issued to former promoter Kalanithi Maran and KAL Airways as part of a 2018 ruling.
SpiceJet had previously informed the Delhi High Court that it was "struggling to stay afloat" after being ordered to make this payment.
In addition to these challenges, earlier this month, the Directorate General of Civil Aviation (DGCA) fined SpiceJet Rs 30 lakh, alongside Air India, for not staffing sufficient pilots trained to land on low visibility conditions (CAT-III landings) during the fog season.
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