Aviation News

SpiceJet to lay off part of its workforce to save Rs 100 cr annually, ET Infra

SpiceJet Boeing 737

NEW DELHI: The cost cutting and manpower rationalization measures taken by low-cost carrier SpiceJet is expected to lead to savings of up to Rs. 100 crore annually, according to the airline.

“As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalization, aimed at achieving profitable growth and positioning ourselves to capitalize on the opportunities in the Indian aviation industry. Through this initiative alone, we anticipate an annual saving of up to INR 100 crore,” the airline said.

About 1,400 employees out of nearly 9,000 are expected to be impacted by the cost cutting measures. The finances of the airline have remained severely weak even before the pandemic hit the wider aviation industry globally. The grounding of the Boeing 737 MAX for almost two and half years till August 2021, due to flight safety issues, made a severe dent in the operations of the airline.

In Jul-Sep quarter, the airline recorded a standalone loss of Rs. 431.5 crore as against a loss of Rs. 837.7 crore in the year ago period, while revenue from operations in the quarter was at Rs. 1,281.1 crore, down 32% year-on-year. In 2023, the airline saw its market share decline from 7.3% in January to 5.6% in December.

In January, the airline received in-principle approval from BSE for the issuance of equity shares on a preferential basis to investors which will result in fund infusion of Rs 2,242 crore into the airline. Half of the amount is to be infused by Mumbai-based businessman Harihara Mahapatra and his wife Preeti Mahapatra.

However, according to a report by The Morning Context, there has been delay and uncertainty whether the investment from Mahapatras will go through or not. SpiceJet in a response to ET Infra however refuted any delay in the investment.

“There aren’t any funding delays and we are progressing well with our fund infusion and have already made our public announcements accordingly. We will be making additional announcements as we progress on the next tranche,” the airline said.

On Monday, shares of SpiceJet closed 4.2% lower at Rs. 65.33 on the National Stock Exchange.

  • Published On Feb 12, 2024 at 05:01 PM IST

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