Budget carrier SpiceJet has announced a 20% salary hike for senior pilots from October on Thursday, September 22. This follows last month’s 6% hike in salaries. Moreover, the company will be depositing the TDS of all employees in the next two-three weeks. And, a significant portion of the PF will also be credited.
SpiceJet received the first tranche of the Emergency Credit Line Guarantee Scheme (ECLGS) payment of around INR 125 crore last week. According to an internal mail to all the pilots, senior VP, Gurcharan Arora said that Spicejet has received the approval for a loan under the government’s ECLGS scheme.
“The first tranche of the payment has already been received and the second trancher is expected very soon. Our management is working to raise an additional USD 200 million.
Keeping with our commitment of increasing salaries in a calibrated manner as our business improves, the salary for the month of October will see an increase of around 20% for our captains and senior first officers.”Captain Gurcharan Arora, SVP – Flight Operations, SpiceJet
The mail also talked about the resumption of normalcy in the aviation sector and said that the airline is flying towards growth and sustainability.
The Gurugram-headquartered airline recently decided to place certain pilots on leave without pay (LWP) for three months, as a temporary measure to rationalise costs.
SpiceJet said the measure, which is in line with the company’s policy of not retrenching any employee which the airline steadfastly followed even during the COVID pandemic, will help rationalize the pilot strength vis-a-vis the aircraft fleet.
The airline said it had inducted more than 30 aircraft in 2019 following the grounding of the Boeing 737 MAX aircraft. The airline had continued with its planned pilot induction programme in 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 SpiceJet.
“We will be inducting MAX aircraft shortly and these pilots will be back in service as the induction begins. During the LWP period, pilots will remain eligible for all other employee benefits as applicable that is all opted insurance benefits and employee leave travel.”SpiceJet
Meanwhile, India’s aviation regulator, the Directorate General of Civil Aviation (DGCA) on Wednesday, September 21 extended the cap on SpiceJet’s operating capacity till October 29. In the order, the DGCA observed that the extension has been given on a review of the safety performance of SpiceJet.
It said that the review has shown an appreciable reduction in the number of safety incidents, however, as a matter of abundant caution, the restriction imposed shall continue to be in force till the end of the Summer schedule on October 29.
The order said that any increase in the number of departures beyond 50% of the total number of departures approved under the Summer Schedule 2022, during the period, shall be subject to the airline demonstrating to the satisfaction of the DGCA that it has sufficient technical support and financial resource to safely and efficiently undertake such enhanced capacity.
On July 27, DGCA ordered the airline to operate only 50% of its flights for eight weeks. SpiceJet incurred net losses of INR 316 crore, INR 934 crore, INR 998 crore and INR 1,725 crore in FY19, FY20, FY21, and FY22.
SpiceJet had earlier reported a net loss of INR 789 crore (INR 420 crore, excluding forex adjustment) for the quarter ending June 30, 2022, as compared to a net loss of INR 729 crore in the quarter ending 30 June 2021 as the business was severely impacted by record high fuel prices and a depreciating Rupee.
The budget carrier is also said to be in talks with potential investors for a likely stake sale. SpiceJet’s promoter Ajay Sigh and his family hold a 59.4% stake in the airline.
It may be noteworthy that India’s top airlines have still not restored the salaries of their employees to pre-COVID levels, citing a rise in fuel costs and limited domestic passenger operations.
While, IndiGo is expected to restore salaries of its pilots, cabin crew, and ground handling staff to pre-COVID levels by September, SpiceJet’s employees have been struggling with delayed payments.
Despite the entry of airlines like Akasa Air and Jet Airways into the Indian aviation space, salaries and jobs of aviation personnel are not expected to rise for the next few years.