New Delhi: Employees of SpiceJet have some reason to cheer. After some uncertain months, relief is in sight as new promoter Ajay Singh told CNBC-TV18 today that there will be no large scale manpower reduction at the airline for now. Singh said his target was to get to the ratio of 90 people per aircraft and the airline is already close to this target.
Though Singh declined to provide more details on manpower restructuring going forward, a source close to him pointed out that there will be significant rejig of the top management but people at junior and mid levels will not be disturbed. This source also said Singh may earmark up to 5 percent of equity for employee stock options.
Singh today brought in Rs 500 crore of the Rs 1,500 crore committed investment in SpiceJet as per the approved revival plan. The source quoted earlier said Singh has raised a soft loan for this investment So will foreign investors - who were said to be in the reckoning earlier for picking up minority stakes in SpiceJet - now come forward? The source said there seems to be "a lot of interest" from domestic investors and some from abroad and that things will become clearer after some weeks.
Singh has already begun massive operational restructuring. The source said SpiceJet has already reduced the number of stations it operates to, from 36 to 31, and there will be further reduction.
Singh said he has not taken any decision on whether to continue with the fleet of Bombardier aircraft (the Q400) and any decision will be effective only later this year, from the winter schedule. "We have anyway done our fleet planning keeping the Q400 in mind for the summer schedule," he said. But the source quoted earlier said phasing out the Q400 fleet was a possibility. As of now, the airline also has 17 operational Boeing 737 aircraft.
Singh said he was in talks with aircraft lessors and other creditors and a schedule for repaying dues was being worked out. He said daily payments are now being made to the Airports Authority of India and to oil companies. "We have already cleared all salary and tax dues. Our attempt is to stay current with all dues and we are in talks with vendors, lessors to sort out all issues," Singh said.
Singh entered into an agreement with erstwhile SpiceJet promoter Kalanithi Maran of the Sun Group on 15 January. The agreement saw the entire 58.46 percent holding of Kalanithi Maran and Kal Airways Private Limited in SpiceJet being transferred to Singh. Though the deal was inked on 15 January, the share transfer happened only earlier this week with the airline informing the Bombay Stock Exchange about the share transfer on 24 February.
Singh, who was one of the original promoters of SpiceJet when it took to the skies in 2005 exited the airline. In his second innings, will he be able to turn around the loss ridden airline which cornered a fifth of the market for some months in 2014? This remains to be seen.
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Updated Date: Feb 25, 2015 16:20:48 IST