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The cash-strapped budget airline is short on liquidity, and investors are apprehensive about fund infusion, CNBC-TV18 said, citing sources. Additionally, the airline company has also delayed salary payments to many of its employees.
The delay in salaries, as well as in depositing the money due to pension funds and taxes deducted from the salaries, has come at a time when the airline owned by Ajay Singh is considering layoffs.
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SpiceJet is set to lay off 1,400 employees, nearly 15% of its workforce, to cut costs and retain investor interest. The airline currently has 9,000 employees and operates about 30 planes. Of these, eight are wet-leased from foreign carriers, along with crew and pilots.
SpiceJet confirmed the job losses. “This is to ensure an alignment of companywide costs as against operational requirements,” a spokesperson said.Staff cuts have become necessary because of the carrier’s Rs 60-crore salary bill, said people with knowledge of the matter.”People have already started getting calls,” said one of them, referring to the terminations. SpiceJet has been delaying salary payments for several months. Many haven’t yet got their January pay.
SpiceJet has said it’s in the process of getting a fund infusion of Rs 2,200 crore but some investors are said to have developed cold feet.
At 11.02. am, the scrip was trading 3.2% lower at Rs 63.5 on BSE. However, the stock has surged 90% in the last six months, and nearly 70% in the last three months.
As per Trendlyne data, the average target price of the stock is Rs 47, which shows a downside of 26% from the current market prices. The consensus recommendation from 2 analysts for the stock is a ‘Hold’.
The stock’s Relative Strength Index (RSI) stood at 50.9. The RSI below 30 is considered oversold, and above 70 is overbought, Trendlyne data showed. MACD is at 2.5, which is above its center line, but below the signal line.
SpiceJet is currently trading above its 50-day, 100-day, 150-day, and 200-day simple moving averages (SMAs), while lower than 5-day, 10-day, 20-day, and 30-day SMAs.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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