SpiceJet Faces Deepening Crisis, May Cut Jobs Amid Salary Delays and Rising Debt

The airline is reportedly considering furloughs and layoffs as salary delays, shrinking fleet size and rising liabilities add to its ongoing financial stress.

Low-cost airline SpiceJet is reportedly preparing fresh cost-cutting measures, including possible layoffs and unpaid leave, as it faces mounting financial pressure and operational challenges.

According to reports, salary delays have worsened in recent months, with some employees allegedly waiting up to three months for payments. Lower-paid staff, including ground handling and housekeeping workers, are said to be among the worst affected.

The airline is also reportedly considering furloughs, with some employees expected to be placed on leave without pay for up to six months starting April 2026.

SpiceJet’s fleet size has reportedly fallen sharply to around 13 aircraft from nearly 50 earlier, although the carrier continues to operate some wet-leased planes. The reduced fleet has reportedly created a mismatch between workforce size and operational needs.

With an estimated workforce of about 6,800 employees, reports suggest more than 500 workers could be affected in the first phase if the restructuring moves ahead.

The airline is also said to be dealing with rising financial obligations despite having raised over Rs 3,000 crore in 2024. Industry estimates cited in reports suggest total dues may now exceed Rs 4,500 crore.

Pending liabilities reportedly include statutory payments such as TDS, provident fund contributions and GST dues. Former employees have also raised concerns regarding delayed settlements and unpaid benefits.

SpiceJet recently informed a court that it was unable to pay around Rs 144 crore owed to Kalanithi Maran of Sun TV Network, adding to concerns around liquidity.

Operationally, the airline has reportedly reduced or exited several routes including Ayodhya, Port Blair, Bangkok, Phuket and Udaipur as it adjusts capacity.

The carrier is also facing stronger competition from better-capitalised rivals such as IndiGo, Air India and Akasa Air, all of which are expanding fleets and routes.

Amid the crisis, SpiceJet is reportedly exploring fresh funding options, including support under the Emergency Credit Line Guarantee Scheme (ECLGS). However, there is no confirmation yet on whether additional assistance will be approved.

SpiceJet has faced repeated turbulence over the past few years, including grounded aircraft, payment disputes and cash flow stress. Industry watchers say any successful turnaround may depend on urgent funding, fleet revival and improved operational stability.

Disclaimer: This report is based on publicly available media reports. Company plans, staffing decisions and funding outcomes may change based on future developments.