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To save on wage bill, SpiceJet asks about 60 pilots to leave

Last updated on: January 10, 2015 14:14 IST

Low-cost carrier SpiceJet asked about 60 pilots who had put in their papers in October-November 2014, to leave on Friday, without waiting for the six-month notice period to run its course.

The cash-strapped airline, which hopes to save Rs 10-15 crore by this move, has also cut the pilots’ notice period to three months. It also halved its Boeing 737 fleet from 35 to 17 on Friday to save on maintenance costs. SpiceJet did not respond to an emailed questionnaire.

The airline, awaiting investment from a consortium led by founder-promoter Ajay Singh, has seen about 100 pilots resign since November, when its financial troubles worsened.

With its reduced fleet size, the airline is left with about 200 Boeing B737 pilots. The pilots who were asked to leave on Friday had requested they be allowed to complete the six-month notice period but SpiceJet rejected it.

“This will lead to a major loss for the pilots because they cannot join new jobs before March and will thus have to lose salary for three months,” a SpiceJet pilot told Business Standard.

“There have been no layoffs; only resigned pilots are departing.

This balances SpiceJet’s reduced pilot needs,” said a company source.

According to Director General of Civil Aviation rules, pilots have to serve a six-month notice period, unless the airline reduces this by itself. In most cases, airlines want pilots to serve the full notice period because of the time and investment required for new recruits.

Kalanithi Maran-promoted SpiceJet, which had paid November 2014 salaries for pilots after a 20-day delay, is now expected to clear wage dues for December 2014 for some junior employees by January 10 and the rest by January 20.

On January 10, the airline will also give the civil aviation ministry details on the funds expected to be raised by the promoters before fresh investment from Ajay Singh comes in by end-February or March this year – the airline is estimated to need about Rs 400 crore to meet daily operating costs till March 2015.

The SpiceJet scrip closed 9.91 per cent higher at Rs 18.30 on the BSE on Friday.

Roudra Bhattacharya
Source: source image