In another display of SpiceJet’s shaky finances, the airline has decided to put many of its pilots on unpaid leave in an attempt to rationalize costs. SpiceJet has been struggling for quite some time, particularly in the wake of the pandemic, which has put the spotlight on its dwindling finances and various operational shortcomings. The latest development is another blow to the overall image of the carrier, impacting its stocks even further.
Pilots sent on leave
This hasn’t been a good year for SpiceJet. The airline, which is already running at half the capacity, has been struggling with weak finances, impacting everything from operations to employee morale. And the latest development does very little to improve the situation.
The budget carrier has sent around 80 pilots on leave without pay for three months to rationalize costs. According to some reports, 40 of those pilots are from its Boeing 737 fleet and the remaining half from the Dash 8 – Q400 fleet.
40 of the affected pilots are said to be from the Dash 8 fleet, and the remaining from the 737 aircraft. Photo: Akshay Mantri
Naturally, the affected pilots are not happy about the situation and feel nervous about their prospects in the company. One of the pilots told the Press Trust of India,
“The financial crisis of the airline was known to us but the suddenness of the decision has shocked many of us. There is also uncertainty about the company’s financial situation after three months. There is no assurance if those forced to go on leave will even be called back.”
What is SpiceJet saying?
The airline released a statement explaining how the grounding of the 737 MAX aircraft has given rise to the present problem. SpiceJet said that it had continued with its planned pilot induction program with the hope that the MAX would be back in service soon. However, the prolonged grounding of the MAX fleet resulted in a large number of excess pilots at the company.
It further added that the temporary measure to put pilots on leave without pay is in line with SpiceJet’s “policy of not retrenching any employee, which the airline steadfastly followed even during the peak of the COVID pandemic.”
The airline said that during leave without pay, pilots will remain eligible for all other employee benefits as applicable, such as all opted insurance benefits and employee leave travel. It said that once more MAX airplanes join its fleet, the affected pilots will be invited back to join the workforce.
This is the latest in a series of troubles SpiceJet has gone through this year. From a spate of flight incidents to the DGCA ordering it to reduce its operations to 50%, SpiceJet has received intense media and public scrutiny in the last few months for all the wrong reasons.
The airline’s stock opened 3.2% lower a day after the announcement and has declined 38% in 2022 so far and is down 47% in the last 12 months. It was also announced recently that SpiceJet is planning a stake sale to raise capital, but nothing has come of it so far.
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