In a bid to streamline operations and reduce costs, SpiceJet (SG, Delhi International) has announced plans to cut 1,400 jobs, which accounts for nearly 15% of its workforce, by the end of March. This move is expected to result in annual savings of approximately INR100 million (USD12 million) in payroll expenses for the low-cost carrier (LCC).
A spokesperson for SpiceJet stated, "As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalisation aimed at achieving profitable growth and positioning ourselves to capitalise on the opportunities in the Indian aviation industry."
With approximately 9,000 employees currently on its payroll, the airline has also been facing unconfirmed reports of delayed salary payments, with a portion of January's payroll remaining unpaid. Employees who are in line for termination have begun receiving notifications.
These workforce reductions come as SpiceJet works through a INR22.5 billion rupee (USD271.1 million) capital raising, which the airline plans to utilize for reducing liabilities, funding growth, and strengthening its balance sheet. The capital raising has been approved by SpiceJet's shareholders, board, and the Bombay bourse.
Recent reports have suggested potential hesitancy from Mumbai-based businessman Harihara Mahapa and his wife Preeti Mahapatra, who had agreed to provide around half of the INR22.5 billion. However, SpiceJet has refuted these claims, stating that there are no funding delays and that the fund infusion is progressing as planned.
Over the last five years, SpiceJet has reported losses of almost INR55 billion (USD662.8 million) and has been gradually losing market share to competitors due to capacity and reliability issues. The LCC is also engaged in negotiations to resolve ongoing legal disputes with lessors, creditors, and other stakeholders.
Currently, SpiceJet operates flights to 46 destinations in five countries with a fleet of 64 aircraft. However, 28 of these aircraft are presently inactive for various reasons, including capacity and reliability issues.
The airline's efforts to restructure its operations and finances are indicative of its commitment to long-term sustainability and profitability in the challenging aviation industry. As it navigates through these changes, SpiceJet remains focused on delivering quality service to its customers while adapting to the evolving market dynamics.
(source ch-aviation | curated by Monica Bellew | Thetransporteronline24 )
