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  1. After sales spree, Spicejet to ‘rightsize’ ops, hike headcount

After sales spree, Spicejet to ‘rightsize’ ops, hike headcount

Going through an ownership change, budget carrier SpiceJet today said it would "very soon" get the first tranche of funds...

By: | New Delhi | Updated: February 13, 2015 6:53 PM
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Spicejet is implementing a number of measures such as fleet rationalisation, optimising aircraft utilisation, re-negotiation of contracts. (Image source: www.spicejet.com)

Going through an ownership change, budget carrier SpiceJet today said it would “very soon” get the first tranche of funds under a recapitalisation process, while plans are being worked out for ‘rightsizing’ of operations including the headcount.

SpiceJet has launched ‘Cheaper Than Train Fares’ offer with ticket prices starting from Rs 599 followed by Jet Airways which today launched attractive fares and customized JetEscapes travel packages on the occasion of Valentine’s Day.

The carrier is implementing a number of measures such as fleet rationalisation, optimising aircraft utilisation, re-negotiation of contracts and other cost control measures.

Talking about the restructuring plan, SpiceJet Chief Operating Officer Sanjiv Kapoor said, “The first tranche of recapitalisation is imminent”.

“It will happen very soon,” Kapoor said in an interview.

The Civil Aviation Ministry has approved the revival plan for SpiceJet that would see original promoter Ajay Singh acquiring majority stake and control in the carrier, while outgoing promoters, Maran family, are also pumping in funds.

The budget carrier yesterday reported a widened net loss of Rs 275 crore in three months ended December 2014, mainly on account of lower passenger numbers and a one-time cost of Rs 295 crore.

On the future outlook, he said, “The worst is behind us” and the operating performance has improved already.

Rejecting apprehensions about possible layoffs, Kapoor however said it would be “furloughs” and the concerned employees would be provided with all benefits and an option to return to the company at a later date.

He said the carrier is working on plan to reduce its overhead costs, including reduction in manpower.

“We are working (on the plan) as soon and as thoughtfully as possible,” Kapoor added.

Without giving specific details, he said that the headcount can come down to “below 4,000”, from the current level of about 4,200.

Amid turbulence, the no-frills carrier has seen its head count decline from a peak of 5,700 seen during the January-February period of 2014.

That time, the airline had about 100 persons per aircraft.

“That reduction in manpower was largely due to natural attrition… Not even one pilot was asked to go,” Kapoor said.

When asked about count of pilots, he said there are “right number of them” but did not provide specific details.

Every area under the overheads is being looked at for optimisation, he added.

The cash-strapped airline was forced to ground flights for some days during the December quarter after its vendors refused to offer credit. This resulted in the airline seeing a 31 per cent decline in capacity, while revenue fell 27 per cent to Rs 1,300 crore.

Kapoor said the performance of the domestic aviation industry is expected to be much better than last year, due to factors such as fall in fuel prices.

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