SpiceJet Hikes Salaries For Some Pilots After Getting ECLGS Funds
SpiceJet's salary hike for its pilots came on a day India's aviation regulator extended restrictions on the airline's flight operations for five more weeks.
SpiceJet Ltd. has hiked salaries of its captains and senior first officers by 20% after it received the first tranche of funds under the government's credit guarantee scheme, according to an internal communication.
The loss-making budget airline is also expected to deposit tax deducted at source, or TDS, of all employees in the next two to three weeks.
The communication to the airline's pilots came after SpiceJet sent 80 of its cockpit crew on leave without pay for three months. Also on Thursday, India's aviation regulator extended restrictions on the airline's flight operations for five more weeks.
“SpiceJet has received the approval for a loan under central government's ECLGS scheme. The first tranche of the payment has been received,” said Gurcharan Arora, chief of flight operations at SpiceJet, in the communique. He did not mention the quantum of funds received as the first instalment.
According to sources, SpiceJet was likely to receive about Rs 225 crore.
Under the ECLGS scheme, announced in May 2020 in the wake of the covid pandemic to help various sectors, entities will get credit at a concessional rate of 7%. On Aug. 17, the Union Cabinet approved enhancing the limit of ECLGS by Rs 50,000 crore to Rs 5 lakh crore.
According to Arora, the second installment of funds under the scheme is expected “soon”. The company “is working to raise an additional $20-million", he said in the internal communication.
Facing financial headwinds amid high fuel costs and a weak rupee, SpiceJet posted a net loss of Rs 789 crore in the June quarter of 2022-23 and Rs 458 crore loss for the quarter ended March 31, 2022.
According to the internal communication, SpiceJet has been working on enhancing the base salary of its pilots.
“Keeping with our commitment of increasing salaries in a calibrated manner as our business improves, the salary for October will see an increase of around 20% for our captains and senior first officers,” said Arora. The TDS will take a few days to reflect in the tax credit statement. Similarly, a significant portion of provident-fund contributions of all employees will also be credited, according to the communication.