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SpiceJet to Lay Off 1,400 Employees

The LCC is facing a slew of issues, prompting new layoffs.

A SpiceJet 737 (Photo: Jane Mejdahl [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)])

Troubled Indian low-cost carrier (LCC) SpiceJet has announced a company-wide layoff of 1,400 employees. 

The airline has been dealing with issues across fronts like leases, lawsuits, and financial crunches. CEO Ajay Singh has been beating all odds by keeping the airline flying and infusing funds through multiple channels and investors.

This entire round of layoffs has been assumed to be because of an apparent infusion of INR 2,200 crore ($265,080), the investors of which are suffering from a case of “cold feet.” The airline has approximately INR 60 crores in unpaid salaries to its workforce. The layoff of 1,400 employees will reduce the salary commitments the airline will have, in the hopes of increasing investor confidence.

The airline has been flying against headwinds since pre-Covid times. When Jet Airways went belly up in 2019, SpiceJet was able to capitalize by plugging the massive vacuum left behind. It took over Jet Airways’ aircraft and slots across the country and cemented itself further in the Indian market.

Regardless of this positive turn of events, the airline’s finances were in limbo, something which isn’t unexpected in the Indian aviation industry. In the months and years following the COVID-19 pandemic, the airline has been facing a continuous stream of issues which has led to lawsuits, distrust among consumers, loss of morale in employees, and financials in the red. 

Ongoing Lawsuits

Owing to issues with payments to lessors, the airline faced a slew of lawsuits filed by multiple creditors in the High Courts and the Supreme Court of India. Lessors threatened to have aircraft and engines seized owing to non-payment of dues. At one point, the Madras High Court had officially asked SpiceJet to wrap up operations and pay its creditors, a decision stayed by the Supreme Court of India. 

There are also ongoing complications vis-a-vis an arbitrary award from 2018 about a share transfer dispute with SpiceJet’s previous promoter Kalanithi Maran.

On top of all the aforementioned issues, the public image and the reputation of the airline in the minds of its customers have hit new lows. Cancellations, long delays, poor communication, etc., have led to the airline’s lower popularity and reliance. 

At the end of the day, this development has again brought to light that things are not going well over at one of India’s oldest surviving LCCs. 

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