SpiceJet (SG, Delhi International) intends to cut 1,400 jobs, or almost 15% of its workforce, by the end of March, according to The Economic Times. The job cuts are expected to save the LCC around INR100 million rupees (USD1.2 million) in annual payroll expenses.
"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," a SpiceJet spokesperson told the outlet.
SpiceJet employs approximately 9,000 people. There are unconfirmed reports that SpiceJet is "delaying" some salary payments, with a portion of January's payroll remaining unpaid. The airline has begun notifying employees in line for termination. The workforce cuts come as SpiceJet works through a INR22.5 billion (USD271.1 million) capital raising, which the airline has previously said will be used to help reduce liabilities, fund growth, and shore up its balance sheet. SpiceJet's shareholders, board, and the Bombay bourse have all approved the capital raising.
Late last month, ch-aviation detailed the individuals and entities to whom shares and warrants would be issued to in the first tranche of the capital raising. While the first tranche covered INR7.5 billion (USD90.4 million) of the total capital raising, the Economic Times says Mumbai-based businessman Harihara Mahapa and his wife Preeti Mahapatra, who had agreed to provide around half the INR22.5 billion, may be getting cold feet. SpiceJet denies this.
"There aren’t any funding delays and we are progressing well with our fund infusion and have already made our public announcements accordingly," the spokesperson said. "We will be making additional announcements as we progress on the next tranche.”
SpiceJet has reported losses of almost INR55 billion (USD662.8 million) over the last five years and has steadily been losing market share to competitors as it experiences capacity and reliability issues. The LCC is also negotiating ongoing legal disputes with lessors, creditors, and other stakeholders.
According to ch-aviation PRO airlines data, SpiceJet operates to 46 destinations in five countries with a fleet of 64 aircraft, including five B737-700s, three B737-700(BDSF)s, twelve (including three wet-leased) B737-8s, nineteen (including five wet-leased) B737-800s, three B737-900ERs, and twenty-two DHC-8-Q400s. However, 28 of these aircraft are presently inactive for various reasons, including three B737-700s, one B737-700(BDSF), three B737-8s, four B737-800s, two B737-900ERs, and fifteen DHC-8-Q400s.
