New Delhi: Even as it awaits investors, troubled low-cost carrier SpiceJet is busy trimming costs. On Friday, the airline’s management asked around 50 captains of its Boeing 737 fleet to leave by the end of the month, despite the six-month notice period stipulated by aviation regulator Directorate General of Civil Aviation (DGCA). Most of these pilots had resigned around October-November this year and were expected to join rivals like IndiGo and Jet Airways around March.
The move will help SpiceJet cut the wage bill, resulting in savings of about Rs 7 crore over three months. This is significant given the carrier is finding it tough to meet daily working capital costs of Rs 8-9 crore. The airline is currently on a cash-and-carry mode with oil companies (it needs to make daily payments) while the Airports Authority of India, whom it owes over Rs 200 crore, has extended it credit till December 31. All in all, the airline has liabilities of over Rs 2,000 crore towards various vendors, lessors and even the taxman.
“Further to your resignation, the management has approved your release from SpiceJet wef 31 December 2014 … If you stand on your decision to resign we will be relieving you with your last working date with SpiceJet as December 31 2014,” a letter seen by FE said.
27/12/14 Roudra Bhattacharya/Financial Express
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The move will help SpiceJet cut the wage bill, resulting in savings of about Rs 7 crore over three months. This is significant given the carrier is finding it tough to meet daily working capital costs of Rs 8-9 crore. The airline is currently on a cash-and-carry mode with oil companies (it needs to make daily payments) while the Airports Authority of India, whom it owes over Rs 200 crore, has extended it credit till December 31. All in all, the airline has liabilities of over Rs 2,000 crore towards various vendors, lessors and even the taxman.
“Further to your resignation, the management has approved your release from SpiceJet wef 31 December 2014 … If you stand on your decision to resign we will be relieving you with your last working date with SpiceJet as December 31 2014,” a letter seen by FE said.
27/12/14 Roudra Bhattacharya/Financial Express
