INVC NEWS
Mumbai : The SpiceJet, an Indian airline, is contemplating laying off at least 1,000 employees. The airline is working towards reducing costs and streamlining the operation of its aircraft fleet. SpiceJet finds itself grappling with financial turmoil, legal battles, and various other hurdles. Consequently, the airline now finds itself with an excess workforce compared to the number of aircraft in its fleet, prompting considerations for layoffs. An official involved in the matter has indicated that a final decision on the extent of the layoffs is expected later this week.
Current Employee Situation at SpiceJet
According to officials at SpiceJet, the airline currently employs approximately 9,000 individuals and is considering reducing the workforce by 10-15 percent. The layoffs aim to trim overall costs for the airline. With this reduction, the company anticipates potential savings of up to 100 crores. A 15 percent cut would mean approximately 1,350 individuals losing their jobs.
Departmental Impact and Preparation
SpiceJet officials have expressed concerns about potential layoffs across all departments. The airline is compiling a final list and preparing a framework for granting leave to management and consultancy staff. Additionally, they have requested input from all departments regarding the impending layoffs. Currently, there have been no official statements from SpiceJet regarding the layoffs.
The Current Financial State of SpiceJet
At present, SpiceJet owns more than 30 aircraft in addition to the 10 planes leased. During a recent meeting with senior officers, SpiceJet’s chairman and managing director, Ajay Singh, stressed the importance of prudent spending and stated that he would personally oversee monitoring of all major expenses. SpiceJet, which has undergone several changes in ownership since its inception and is currently operated by Ajay Singh, is in the process of raising funds from various investors. The airline announced on January 26th that it has raised 744 crores. Additionally, it has availed of a fund of approximately 1000 crores under the government’s Emergency Credit Line Guarantee Scheme (ECLGS), with Singh pledging to invest 500 crores.
Recent Legal Issues and Challenges
Recently, SpiceJet has sought legal assistance to reclaim aircraft leased to lessors due to non-payment of dues. India is one of the fastest-growing aviation markets globally, with domestic air travel on the rise. However, SpiceJet has been struggling in recent times. In 2023, the carrier flew 8.39 million passengers with a domestic market share of 5.5 percent.
