Low on funds A news article stated that SpiceJet has postponed paying salaries and EPFO deposits due to rumors that it intends to fire 1,400 workers in an effort to reduce operating expenses. Over 75% of the employees have received their salaries thus far, according to a representative for the airline run by Ajay Singh. According to a CNBC TV-18 broadcast on Wednesday, the pension fund deposits will take place in the "near future".
Due to financial difficulties, legal disputes, and other challenges, the budget airline may request that more employees resign because there are currently more workers than there are planes in operation. This week, a final decision regarding the number of layoffs is anticipated, according to a Monday report from news agency PTI.
According to an airline executive, the company employs about 9,000 people and is considering cutting that number by 10% to 15%. The person went on to say that layoffs are required to lower overall expenses and that there may be annual savings of up to Rs 100 crore.
Except for ten aircraft that are on wet lease, SpiceJet currently operates a fleet of little over thirty aircraft.
Ajay Singh, the chairman and managing director of SpiceJet, stressed the value of prudent spending during a meeting with the airline's senior managers last month. He also stated that he will personally supervise any significant expenditures. According to an internal memo last month, the carrier will prioritize fleet upgrades, improve on-time performance, and implement cost-cutting initiatives to streamline operations.
SpiceJet reaffirmed its intention to make a post-due diligence bid to Go First's Resolution Professional (RP) in December 2023. The airline stated that the goal of the acquisition proposal is to establish Go First as a strong and viable airline in a possible combination with SpiceJet in an exchange filing.
"The Board of the company has recently approved and initiated the process of raising fresh capital of about US$ 270 million to strengthen its financial position and provide resources to invest in growth plans," stated SpiceJet.
SpiceJet, Sky One, a Sharjah-based aviation firm, and Busy Bee filed a formal expression of interest (EoI) and a bank guarantee of Rs 5 crore for the bankrupt Go First Airlines in January.
These organizations were given time to research the airline. It has been claimed that lenders have suggested prolonging the resolution process's deadline.
The low-cost airline is still awaiting its Q3 financial report. SpiceJet revealed in December that, compared to the same period the previous year, its consolidated net loss for the quarter that ended in September 2023 decreased to Rs 449 crore from Rs 830 crore. The previous June quarter saw a profit of Rs 198 crore for the corporation.
Since its founding, SpiceJet, under the direction of Ajay Singh, has undergone multiple ownership changes and is currently in the process of obtaining money from various sources. The carrier declared on January 26 that it has received the first tranche of the Rs 2,250 crore that will be raised through the preferential issuing of securities, amounting to Rs 744 crore.
There have been rumors that the necessary money has not been raised in a timely manner.
Under the government's Emergency Credit Line Guarantee Scheme (ECLGS), the airline has also received funding totaling about Rs 1,000 crore, and Singh has pledged to contribute an additional Rs 500 crore.
On February 14, SpiceJet's stock dropped by more than 5%. SpiceJet's stock was down 3.92%, trading at Rs 63.06 at 11:40. The stock's 52-week low is Rs. 22,65, and its 52-week high is Rs. 77.5.
