No-frills airline SpiceJet said on Friday that it would "very soon" receive the first tranche of funding from its new investors – Ajay Singh and his financial backers, as part of the recapitalisation programme.
"The first tranche of recapitalisation is imminent", SpiceJet's Chief Operating Officer Sanjiv Kapoor told PTI.
The company also spoke of "right-sizing' its operations, to indicate that headcount numbers are expected to be revised.
Starting with fleet rationalisation, SpiceJet is under mounting pressure to bring its cost in line with the funds available. It is looking at optimising aircraft utilisation, renegotiation of contracts and limit costs across the spectrum.
With the Ministry of Civil Aviation giving its approval, SpiceJet has been reacquired by Ajay Singh, the original promoter, from the Maran family, who exited the airline at a significant loss.
Ajay Singh is expected to bring as much as ₹1,500 crore to the beleaguered airline.
The company posted a net loss of ₹275 crore for the third-quarter, as it reeled from falling revenue and having to trim its fleet from 35 to 19 planes.
'The worst is behind us'
The COO said that SpiceJet's worst business conditions are in the past and added that operating performance has already started to improve.
He asserted that SpiceJet would go for "furloughs," rather than laying off its staff. The employees are to be provided all benefits with an option to return to SpiceJet at a future date.
He, however, admitted that reduction in manpower would be necessary to reduce overhead costs.
Kapoor declined to give specific numbers, though he noted that the headcount has dropped to "below 4,000" against 4,200 employees it carried on its rolls earlier.
In January-February 2014, SpiceJet recorded a peak of 5,700 employees, at about 100 staff for every aircraft. The turbulence the company faced has seen its employees leave the organisation, including pilots.
"That reduction in manpower was largely due to natural attrition... Not even one pilot was asked to go," Kapoor said.
He insisted that all overheads are being subjected to scrutiny, under the cost-cutting plan.
In December, SpiceJet was forced to ground flights after certain vendors refused to supply the company with the essentials over unpaid credit outstanding.
Finally, Kapoor added that the performance of the Indian domestic aviation industry looked better in the current year, with the cost of aviation fuel coming down, which helps stem some of its major costs.
SpiceJet shares closed Friday at 19.65, down by 0.40 or 2%.
