Cash strapped SpiceJet has not paid PF dues for 18 months: Sources

The beleaguered airline SpiceJet is in the midst of several turbulences. Sources have told CNBC-TV18 that the airline has not deposited Employees' Provident Fund (EPF) for 18 months in a major default and non-compliance of norms. Additionally, the airline has also not deposited Tax Deducted at Source (TDS) for employees since FY23.

However, the airline, in its reply to CNBC-TV18's query, said that it had initiated the process to deposit TDS and is set to clear a "substantial" amount soon.

"The process for depositing TDS has been initiated by the company and Form 16 is being gradually released. There has been certain deferral on discharging of some payments and we hope to deposit a substantial outstanding amount soon," the airline said.

SpiceJet's vendors, too, are subject to frustration as they wait to receive their pending dues. The stress has started to trickle down on employees with many senior staff not getting salaries till the third week of the month.

The problems don't end here with SpiceJet's legal headwinds being a separate chapter altogether.

SpiceJet has paid only $2 million of the total $24 million it owes to Credit Suisse. The airline has been failing to pay Rs 4 crore per month to Credit Suisse as agreed in the consent terms.

The Delhi High Court on August 24 directed SpiceJet's Chairman and MD Ajay Singh to pay Rs 100 crore to Marans by September 10 as part of the Rs 390 crore interest payment sought by Kalanithi Maran. The failure to do so could lead to the court attaching the company's assets.

SpiceJet had told the court it is unable to pay the amount due to unavailability of funds and also invoked the bankruptcy law. The airline told the court that Marans will become operational creditors and are unlikely to get much if the company is pushed into bankruptcy.

Five of SpiceJet's lessors have filed insolvency pleas against the cash strapped airline over non-payment of dues. Aircastle has filed two pleas, Wilmington has filed one plea while Celestial and Willis Lease Finance have filed one plea each.

The airline's market share talks a lot about its overall health. The market share has almost halved from 8 percent in July 2022 to 4.2 percent in July 2023.

As per fleet tracking site Planespotters, SpiceJet's fleet size has decreased by almost 50 percent with the airline flying 31 of the 58 aircraft as 27 planes are on ground.