Monday, February 26, 2024
Monday, February 26, 2024
HomeBusinessCash-strapped SpiceJet to cut 1,400 jobs to save costs

Cash-strapped SpiceJet to cut 1,400 jobs to save costs

Indian airline SpiceJet will lay off 1,400 employees in a bid to cut costs and attract investors, according to a report published on Monday. This figure constitutes 15 percent of the airline’s total workforce and layoffs have already begun, he added.

According to the Economic times (Eastern Time), the airline would have been delaying the payment of salaries for several months. He claims many employees have not received their January salaries. Their total wage bill currently amounts to $60 crores.

Therefore, layoffs are being made to align company-wide costs with operational needs.

Watching an infusion of funds $2,200 crore, SpiceJet said financing plans are on track and an announcement is expected soon.

With 9,000 employees currently working with the airline, SpiceJet operates around 30 aircraft. Of these, eight aircraft, along with crew and pilot, are wet-leased to international companies. In 2019, when the airline was at its peak, SpiceJet had a fleet of 118 aircraft and 16,000 employees.

Akasa Air, with 3,500 employees for a fleet of 23 aircraft, is SpiceJet’s closest rival.

Last week, the Delhi High Court ordered the low-cost airline to pay $50 crore to former promoter Kalanithi Maran and KAL Airways in six weeks, as part of a 2018 arbitration award.

In November, Raymach Technologies filed an insolvency petition against Spicejet under Section 9 of the Insolvency and Bankruptcy Code, 2016, for a breach of $2.7 crores. The company claims to have provided business consulting services and technical support to the airline. On February 8, the low-cost airline informed the National Company Law Tribunal that it was attempting to reach an agreement with the supplier.

The airline’s share price fell after the news broke. On Monday morning the company’s shares fell 3.8 percent and were trading at $65.59 each in BSE.

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Posted: Feb 12, 2024, 11:01 am IST

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