SpiceJet layoffs: Airline aims to save ₹100 crore a year from cost cutting measures

SpiceJet's fleet size is down to 40 planes from 118 before the pandemic. Of the existing 40, ten planes are wet-leased.  A wet-leased aircraft comes with at least with complete crew, maintenance, and insurance, provided by the owner of the aircraft to the airline operator.

The airline aims to boost investor confidence with these cost-saving measures. "As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures. The steps include manpower rationalization, aimed at achieving profitable growth and positioning ourselves to capitalize on the opportunities in the Indian aviation industry. Through this initiative alone, we anticipate an annual saving of up to ₹100 crore," a SpiceJet spokesperson said.

The fund infusion referred to above is the December 2023 board approval allowing the company to raise ₹2,250 crore from 40 investors.

SpiceJet has also shown interest in bidding for its grounded peer, GoFirst.

SpiceJet had a 5.5% market share in 2023, making it the fifth-largest airline with a passenger traffic of 8.39 million. The Indian airline industry is dominated by Interglobe Aviation, which operates IndiGo airline, with a 62% market share in December 2023.

SpiceJet's market share peaked at 7.3% in January 2023, and since then, it even fell below the share of Akasa, the latest entrant, for two months.

After five straight years of losses, Ajay Singh's airline saw a glimmer of hope in the first quarter of the current financial year. However, the profit of ₹198 crore in April-June 2023 quickly turned into a loss of ₹449 crore in the following three months.

The loss in July-September 2023 for SpiceJet was 45% narrower than the same period in 2022. The airline is yet to declare its earnings for the October to December period.