SpiceJet places some pilots on leave without pay to cut costs
Premium- Around 70-80 pilots from the Boeing 737 fleet and the Bombardier Q400 fleet have been put on leave without pay for a period of three months
SpiceJet has decided to put around 80 pilots on leave without pay for a period of three months in a move to cut costs, people aware of the matter told Mint.
"Around 70-80 pilots from the Boeing 737 fleet and the Bombardier Q400 fleet have been put on leave without pay for a period of three months. It is a matter of concern and has impacted the morale of the employees at the airline," a person aware of the development said on the condition of anonymity.
In a response to Mint's query, the airline said that it has decided to place certain pilots on leave without pay for a period of three months as part of a temporary measure to rationalise cost. This measure will help the airline to rationalise pilot strength as per the aircraft fleet, an airline spokesperson said.
The airline has been restricted to operate flights up to 50% of its capacity as per a July 27 order by the regulator Directorate General of Civil Aviation. According to the order, SpiceJet's operations have been cut for eight weeks from July 27, during which it will remain under the regulator's enhanced surveillance. The airline has to demonstrate sufficient technical support to the aviation regulator for it to be allowed to fly more than 50 percent departures beyond the 8-week period.
The airline is also in need of recapitalisation. It has faced a series of headwinds for more than three years now, including the grounding of the fuel-efficient Boeing 737 MAX in March 2019 following two fatal accidents involving the plane. The Covid outbreak in early 2020 severely impacted India’s aviation sector, and pushed all airlines to a temporary air pocket. Following the cap on operating capacity, it had to de-register six aircraft in August due to “non-payment of dues" to lessors.
It had also suffered a ransomware attack in May, which led to postponement of its earnings. While the earnings were issued on 31 August, it has sought an extension of the timeline to convene its annual general meeting.
The airline's CMD Ajay Singh recently said that the airline is engaging with investment bankers to raise $200 million.
The latest move by the airline to put pilots on leave without pay has left some disappointed.
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"I am considering to quit the aviation industry. I am thinking of taking up my family business. As if surviving on less than pre-COVID salaries was not enough, that now the airline has taken this drastic step. I have lost hope," a pilot who was impacted told Mint.
The prolonged grounding of the MAX fleet resulted in a large number of excess pilots at SpiceJet, the airline said.
"We will be inducting MAX aircraft shortly and these pilots will be back in service as the induction begins," the airline added.
During the leave without pay period, ilots will remain eligible for all other employee benefits as applicable i.e. all opted insurance benefits and employee leave travel, the airline added.
"Even after placing certain pilots on leave without pay, SpiceJet will have sufficient number of pilots to operate its full schedule as and when the DGCA restriction on flights is lifted," the airline added.
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