SpiceJet clears December wages after month's delay; no clarity on Jan salaries

Airline has liabilities of Rs 1,400 cr to airports and vendors, and accumulated losses of Rs 3,000 cr

Troubled budget-airline SpiceJet on Saturday cleared the December wage dues of all employees, a day after its board approved the transfer of promoter Kalanithi Maran’s entire stake of 58.46 per cent to co-founder Ajay Singh.

January salaries are yet to be paid. SpiceJet normally pays wages on the last day of each month.

“Senior pilots and managers received their December salaries on Saturday morning and co-pilots and crew on Thursday. Wages are coming in with a month’s delay now and no timeline has been given for January salary payments,” a company source said. A second airline executive confirmed the December salaries had been paid.

SpiceJet has been lagging in wage payments since December, when its financial troubles escalated. Around 70 pilots have since resigned, and the airline is also laying off over 1,000 people across stations and functions. The airline owes about Rs 1,400 crore to airports and several vendors and has accumulated Rs 3,000 crore in losses.

SpiceJet has reduced its fleet to 35 aircraft, 20 Boeing B737s and 15 Bombardier Q400s, from 50 last July. But a revival plan submitted to the aviation ministry earlier this month said the airline would soon start expanding. By April SpiceJet aims to add six more B737s by re-negotiating with leasing companies that have been chasing it to return aircraft because of delayed payments.

The investment plan approved by the SpiceJet board on Friday requires Singh to invest Rs 1,500 crore and Maran Rs 375 crore through conversion of warrants. Singh has already invested Rs 100 crore in January, with another Rs 400 crore expected in February.

The new investors are expected to seek a waiver from the stock market regulator on an open offer.

Maran, his wife Kavery Kalanithi and associate S Natrajhen resigned from the SpiceJet board amid indications that more management changes are likely soon.

The SpiceJet stock closed 1.83 per cent higher at Rs 22.20 on the Bombay Stock Exchange on Friday.