SpiceJet layoffs, SpiceJet share price: Gurgaon-headquartered low-cost airline SpiceJet is planning to lay off at least 1,000 employees as a part of its cost-cutting process, the aviation company said on Monday, February 12.
“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. Through this initiative alone, we anticipate an annual saving of up to Rs 100 crore,” Spicejet’s spokesperson told Zee Business reporter.
Reacting to the development, the company’s shares slipped in the trade on Monday. The stock declined over 4.6 per cent in the intraday trade. Last seen, it was trading 3.21 per cent lower at Rs 65.99 on the BSE.
Spicejet can lay off up to 15 per cent of its employees until March this year, according to a source. This way, the company will save around Rs 100 crore a year. Apart from this, Spicejet is in talks to get cheaper aircraft on lease.
Currently, the company is operating with a one-fourth fleet size, in which there are 30 aircraft apart from 10 planes that are on wet lease.
The company will make further changes after the new investment. The airline has around 9,000 employees currently, and a reduction of 15 per cent would mean around 1,350 people would lose their jobs.
Layoffs are expected across departments, and the final list is being prepared. People from 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, PTI reported, quoting an official as saying.
Another official, according to the PTI report, 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 report added.
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 would personally oversee all major expenditures.
The carrier will prioritise fleet upgrades and 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 had received Rs 744 crore as the first tranche of the total of Rs 2,250 crore proposed to be raised through the issuance of securities on a preferential basis.
There were reports that there had been a delay in raising the requisite funds.
The airline has also availed funds worth around Rs 1,000 crore under the government’s Emergency Credit Line Guarantee Scheme (ECLGS), and Singh has committed to infusing Rs 500 crore.
In recent times, SpiceJet has 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 domestic air traffic is on an upward trajectory. However, SpiceJet has been struggling for some time now. In 2023, the carrier flew 83.90 lakh passengers and had a domestic market share of 5.5 per cent.
With PTI inputs