Crisis-hit SpiceJet plans to hand out pink slips to at least 1,000 employees in the coming days as the airline works to significantly reduce costs and streamline operations of its depleted aircraft fleet, officials said on Monday.
Faced with financial woes, legal battles and other headwinds, the no-frills carrier might ask more staff to leave as there is excess manpower now compared to the number of planes in service. A final decision on the quantum of layoffs is expected this week, one of the officials in the know said.
The airline has around 9,000 employees and is now looking at reducing the strength by 10-15 per cent, the official said, adding that layoffs are necessary to reduce the overall costs and annual savings could be up to ₹100 crore.
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A reduction of 15 per cent would mean around 1,350 people will lose their jobs.
The second official in the know said that layoffs are expected across departments and the final list is being prepared. People from the management and consultancy are working on chalking out the contours of letting staff leave, and all the departments have been asked to give their inputs, the official added.
The second official explained that the airline has stopped operations on certain RCS (Regional Connectivity Scheme) routes and at those stations, there is excess manpower, especially staff with lower salaries. Relocating such people will be a challenge, the official noted.
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“As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalization, aimed at achieving profitable growth and positioning ourselves to capitalize on the opportunities in the Indian aviation industry. Through this initiative alone, we anticipate an annual saving of up to INR 100 crore,” a SpiceJet spokesperson said.
Currently, SpiceJet has a fleet of little over 30 aircraft apart from 10 planes that are on wet lease.
During a meeting with the airline’s senior officials last month, SpiceJet Chairman and Managing Director Ajay Singh emphasised the importance of judicious spending and that he will personally oversee all major expenditures.
The carrier will prioritise fleet upgrades, enhance on-time performance and cost-cutting measures will be implemented to streamline operations, according to an internal note last month.
SpiceJet, which has undergone multiple ownership changes since inception and is currently helmed by Ajay Singh, is in the process of raising funds from various investors.
On January 26, the carrier announced that it has received ₹744 crore as the first tranche of the total ₹2,250 crore proposed to be raised through the issuance of securities on a preferential basis.
There were reports that there has been a delay in raising the requisite funds.
The airline has also availed funds worth around ₹1,000 crore under the government’s Emergency Credit Line Guarantee Scheme (ECLGS) and Singh has committed to infuse ₹500 crore.
In recent times, SpiceJet also witnessed lessors taking legal recourse to take back their leased aircraft due to non-payment of dues.
India is one of the world’s fastest growing civil aviation markets and the domestic air traffic is on an upward trajectory. However, SpiceJet has been struggling for sometime now. In 2023, the carrier flew 83.90 lakh passengers and had a domestic market share of 5.5 per cent.