Troubled budget airline SpiceJet continued to get life support to remain alive as the company struggled to cut losses and turn attractive for a fund infusion from its saviour Ajay Singh.
According to a report in the Business Standard citing company sources, the airline is likely to cut about 1,000 jobs in a few weeks to limit the operational losses. Earlier reports had said the company has cut the number of schedules to just around 240 flights from the earlier 350.
The job cuts will help the airline to cut costs. Earlier, the airline had waived off the six-month notice period for 50 of its pilots, who had resigned. The move could have helped the company save around Rs 22 crore, a report in Mumbai Mirror newspaper said.
According to the BS report today, the company is taking the step in a desperate bid to cut losses as that is a precondition for its co-founder Ajay Singh to invest in the company. The expectation is that SpiceJet will get around $200 million investment towards the end of this month.
The job cuts will be across departments such as ground staff and crew, an airline source has told the newspaper. "New investors are negotiating hard with promoter Kalanithi Maran," the source has been quoted as saying in the report.
That the prospective investors are bargaining hard with the promoters is clear. Earlier sources had told Firstpost that the talks between Singh and the Marans were on the brink of collapse as the former had insisted on the current promoters paying off nearly Rs 1,100 crore in liabilities before making any investment commitment. The dues were related to aircraft lease rentals and advance bookings which SpiceJet made until October 2015.
Meanwhile, life support for the airline continued with the Airports Authority of India, which owns about 124 airports in the country, deciding to extend the credit line for the airline without any deadline, a report in the DNA said. Earlier the state-owned agency had given a deadline until January 10 to repay the dues after which the airline was to be put on cash and carry mode.
Cash and carry means the company would have to make payment upfront before using the airports owned by the AAI. As per reports, the airline owes about Rs 280 crore to the AAI.
"It (SpiceJet) has not been put on cash and carry as it has given some undertaking," an AAI official has been quoted as saying in the DNA report. He also said though there is no deadline given, the AAI will take a relook at the decision after some time.
In another surprise development, an unknown company called Kamlesh Auto has bought over Rs 6 crore worth of SpiceJet shares through a bulk deal yesterday. A PTI report said citing a BSE filing that Kamlesh Auto acquired 35 lakh shares at a price of Rs 18.23 apiece.
SpiceJet had presented a revival plan to the Civil Aviation Ministry in late December but was asked to submit a revised plan with more details.
Updated Date: Jan 13, 2015 09:51 AM