SpiceJet Planning For Layoffs As Headwinds Mount Amid Financial Constraints

India’s low-cost carrier SpiceJet is staring at fresh job cuts as its financial troubles intensify, with salary delays, shrinking operations and mounting liabilities putting pressure on the airline.

The airline has initiated aggressive cost-cutting measures, including furloughs and leave without pay, as it looks to align expenses with its reduced scale of operations, The Economic Times reported.

Employees are being placed on unpaid leave for up to six months starting April 2026, the report said.

The financial strain has worsened alongside a sharp contraction in operational capacity.

SpiceJet’s fleet has dropped significantly to around 13 aircraft from nearly 50 earlier, creating a mismatch between staffing levels and flight operations.

With a workforce of about 6,800 employees, industry estimates suggest that over 500 staff could be impacted in the initial phase, with further reductions likely if the situation does not improve.

Salary delays have also become more severe, with payments now reportedly pending for up to three months in some cases.

Lower-income staff, including ground handling and housekeeping workers, have been among the worst affected.

The airline’s liabilities continue to mount despite raising over Rs 3,000 crore in 2024, with total dues estimated to have crossed Rs 4,500 crore. Pending obligations include statutory payments such as GST, provident fund contributions and tax deducted at source (TDS).

SpiceJet is also dealing with operational challenges, including route rationalisation and increased competition from better-capitalised rivals like IndiGo, Air India and Akasa Air.

At the same time, domestic passenger demand has softened, putting further pressure on fares and profitability.

Amid the mounting crisis, the airline is exploring fresh funding options, including seeking support under the Emergency Credit Line Guarantee Scheme (ECLGS). However, it remains uncertain whether additional financial backing will be extended.