Beleaguered airline SpiceJet has missed the deadline set by the Directorate General of Civil Aviation (DGCA) to...
Beleaguered airline SpiceJet has missed the deadline set by the Directorate General of Civil Aviation (DGCA) to pay salaries to its staff — including pilots, cabin crew and ground staff — by Wednesday, sources at the airline told FE.
The no-frills carrier, which usually pays salaries on the last date of the month, has informed senior employees that it will pay December salaries to cabin crew and ground staff by January 10 and to pilots by January 20, two people working with the airline said, on condition of anonymity.
These sources said that no disruptions of flight schedules was expected this time around, unlike in December when the airline cancelled the bulk of its flights for two days (December 16 and 17) after oil companies stopped supplying fuel to the airline.
But SpiceJet resumed regular services — operating 230 flights a day — from December 18, after the government asked airport operators and fuel suppliers to give it more time to make outstanding payments. The government’s intervention also led the DGCA to revoke its earlier decision of asking the carrier to cap forward bookings to a maximum of 30 days till December 31. The airline was earlier taking bookings till March 31, and is doing so again.
Due to the financial crunch, SpiceJet had held back November salaries of those employees who fall in the top 15% bracket in terms of wages till December 22. On December 5, DGCA had asked the airline to pay salaries to its staff by the seventh of every month.
A SpiceJet spokesperson refused to comment.
The Kalanithi Maran-controlled SpiceJet, which has accumulated losses of over R3,000 crore till date, managed to clear liabilities of around R400 crore towards income tax and service taxes dues in October. This left the airline’s bank accounts empty and forced it to survive on cash flows from daily earnings arising out of forward bookings — about R13-14 crore a day at that time.
In end December, the Sun Group — Maran’s flagship — said it was unable to inject more funds to revive SpiceJet. But since then, a ray of hope has emerged in the form of Ajay Singh, one of the airline’s original promoters, coming forward with a revival plan with some other investors.
Average salaries of pilots at Indian airlines (per month)
Rs 1.5 lakh to Rs 3.5 lakh
Rs 5.6 lakh to Rs 7 lakh
* Earnings by pilots of both wide-bodied and narrow-bodied aircraft
Source: Industry, company