Due to ongoing financial troubles, SpiceJet Airlines is preparing to lay off 1,400 employees, or roughly 15% of its total workforce, as part of cost-cutting measures designed to keep investors interested. The financially stressed low-cost carriers confirmed the story to The Economic Times (ET), defending the layoffs by arguing that corporate expenses must be balanced with operational requirements.
At the moment, the airline has 9,000 employees and has about 30 aircraft, eight of which are wet leases from outside carriers. Workforce reductions were required as a result of the carrier's alleged Rs 60 crore wage bill. According to reports, many workers are still waiting for their January wage because it is several months past due.
The airline has been making efforts to secure a fund infusion of Rs 2,200 crore. According to ET, however, investor apprehension may be impeding the capitalisation process. Despite this, the airline remains optimistic about fund procurement, asserting that funding initiatives are progressing as planned, with the majority of investors onboard.
At its busiest in October 2019, SpiceJet had 118 aircraft in its fleet, employed around 16,000 people, and maintained a 16.3% share of thedomestic market. The airline flew to 51 local and 9 overseas destinations on its 516 daily flights.
The arbitral award given to KAL Airways and erstwhile promoter Kalanithi Maran as part of a 2018 ruling is one of SpiceJet's financial problems. After receiving an injunction to make this payment, SpiceJet had informed the Delhi High Court the previous year that it was "struggling to stay afloat".
Along with Air India, the low-cost carrier was fined Rs 30 lakh earlier this month by the Directorate General of Civil Aviation (DGCA) for failing to roster enough pilots during the fog season who are qualified to land on limited visibility (CAT-III landings).
