'At strongest financial position in recent times': SpiceJet clarifies on delayed salaries, layoffs

Hours after it was reported that there was trouble in cash-strapped SpiceJet's paradise, the low-cost airline said that it is currently at its strongest financial position in recent history. Earlier it was reported that SpiceJet had delayed the payment of salaries and EPFO deposits. Besides, it is also planning to cut jobs. 

News agency PTI reported that SpiceJet, which is facing financial woes, legal battles and other headwinds, may take a final call on the quantum of layoffs is expected later this week.

Clarifying its stand, SpiceJet, in a statement, said: “SpiceJet is currently at its strongest financial position in recent history. We've successfully completed the first tranche of capital infusion, amounting to INR 744 Crore, and have received significant additional subscriptions pending regulatory approval. Furthermore, the Company has initiated the process to raise an additional INR 1500 crore. SpiceJet already has valid and subsisting approval of shareholders for raising up to INR 2500 through QIP and for this process it need not go to shareholders again."

It further added that: "These funds are being utilized in accordance with the shareholders' resolution, prioritizing statutory dues, vendor payments, and other outstanding dues. We want to clarify that regular payments are being made to lessors, and any reports suggesting outstanding amounts are baseless and denied. The airline has extended many aircraft leases and has also signed up for fresh lease agreements starting summer schedule 2024. SpiceJet is actively engaged in discussions for long-term lease contracts with lessors, signalling our commitment to expand our fleet and network.”

“As part of our turnaround and cost-cutting strategy, we've implemented several measures, including manpower rationalization, aimed at achieving profitable growth and capitalizing on opportunities in the Indian aviation industry. We anticipate significant annual savings, up to INR 100 crore, through this initiative alone," the low-cost airline said.

Currently, SpiceJet has a fleet of little over 30 aircraft apart from 10 planes that are on wet lease. 

In December 2023, SpiceJet announced its interest in acquiring Go First and intends to submit an offer after conducting a thorough due diligence of the financially troubled carrier. 

In January, SpiceJet promoter Ajay Singh reportedly submitted a Rs 5-crore bank guarantee and a formal expression of interest (EoI) for the bankrupt Go First Airlines. 

At 1 PM, shares of SpiceJet were trading at Rs 62.92, down by 4.13 per cent.