SpiceJet layoffs 2026: 500+ hit as fleet falls to 13

Why SpiceJet is back in focus

SpiceJet has started workforce reductions as the low-cost carrier faces a fresh squeeze on liquidity, with salary delays stretching to months and operations running at a much smaller scale than before. Media reports citing internal communications say the airline is using furloughs and leave without pay to cut costs as financial obligations pile up. The developments come as competition in India’s aviation market intensifies and passenger demand has softened. Aviation fuel costs have also remained volatile, adding to pressure on airline economics.

Chairman Ajay Singh has acknowledged government support in moderating steep hikes in jet fuel prices, but reports indicate that this has not been enough to ease SpiceJet’s broader cash crunch. Compared with rivals IndiGo, Air India and Akasa Air, which have stronger balance sheets or large group backing, SpiceJet is described as operating with limited liquidity and tighter constraints.

Furloughs and job cuts: what the report says

According to The Economic Times, more than 500 employees are expected to be impacted in the first phase of workforce action. SpiceJet employs around 6,800 staff, and the report said internal estimates suggest further rounds could follow if financial conditions do not improve. An airline executive quoted by ET said around 20% of the workforce could eventually be affected.

The report described a mix of layoffs, furloughs and leave without pay (LWP), positioned as cost rationalisation and workforce alignment measures. Employees were informed through an HR letter dated 31 March about a six-month furlough window from 1 April to 30 September 2026, citing reduced operational capacity. While some measures are framed as temporary, the impact for staff is immediate because the leave is unpaid.

Salary delays stretch to three months

Salary delays have reportedly worsened. Payments that earlier ran about a month late are now said to be pending for as long as three months in some cases. ET reported that as of early April, several higher-paid employees had not received January salaries.

Lower-paid workers, including ground handling and housekeeping staff, were described as among the hardest hit, with some waiting for multiple months of pay. The cash strain has also complicated exits and transitions. In one set of cases cited in the report, engineers serving notice periods before joining other airlines had their notice periods waived abruptly, leaving them without income during the gap.

Engineers and pilots face operational and pay disruption

A specific flashpoint in the reports is the engineering function. Around 62 engineers who had resigned and were serving notice were told on 31 March that their notice period was waived, making that day their last working day. With an engineering workforce of about 800, the reports flagged concerns about more exits.

Operational changes have also reached pilots. A revised contract for Q400 pilots introduces a 21-days-on, nine-days-off schedule. Management has described this as a work-life balance measure, but pilots cited in the report estimate it could reduce monthly earnings by around 20%.

Fleet shrinkage and reliance on wet leases

SpiceJet’s reduced operations are central to the manpower reset described in the reports. The airline’s fleet has reportedly shrunk to 13 aircraft from nearly 50 earlier. The report also said SpiceJet is operating around 14 wet-leased aircraft that come with external crew, which can reduce staffing needs on certain functions.

Separately, SpiceJet later said it has a fleet of a little over 30 aircraft, apart from 10 planes on wet lease. The differing figures highlight how the active fleet mix has become a key detail in assessing the airline’s near-term capacity.

Funding search: ECLGS and fresh capital plans

With dues mounting, SpiceJet is exploring fresh funding options, including seeking support under the Emergency Credit Line Guarantee Scheme (ECLGS). The airline had previously availed funds under the scheme during the pandemic and is now reportedly seeking an additional ₹2,000 crore. The scheme offers collateral-free loans with a two-year moratorium on principal repayment, which could provide short-term breathing room if approved.

The reports also note that SpiceJet raised over ₹3,000 crore in September 2024, but liquidity pressure appears to have persisted. Industry estimates cited in the report peg overall liabilities at more than ₹4,500 crore.

Mounting liabilities, statutory dues and court-related payments

The airline has told a court it was unable to pay around ₹144 crore owed to Kalanithi Maran of Sun TV Network, according to the report. Statutory liabilities have also become a focus. Pending statutory dues are estimated to exceed ₹100 crore, including unpaid GST, provident fund contributions and TDS.

One report also claimed TDS and GST have not been deposited since April 2025, and another cited an English court order to pay around ₹68 crore in an aircraft lease dispute. In addition, a separate account included in the provided material referenced an Indian court order requiring SpiceJet to take three aircraft engines out of service due to a $1 million debt to engine leasing companies.

Route shutdowns and softer passenger demand

SpiceJet has been rationalising its network as capacity reduces. Routes cited as shut include Ayodhya, Port Blair, Bangkok, Phuket and Udaipur, with the airline indicating further adjustments may follow.

The broader market context is also turning less supportive. The report said domestic passenger demand has softened from around 520,000 passengers daily to nearly 440,000. With rivals expanding fleets and adding capacity, the combination of softer demand and higher competition can pressure fares and yields.

Company response: “strongest financial position” claim

After reports about salary delays, EPFO deposits and job cuts, SpiceJet issued a statement saying it is at its strongest financial position in recent history. The airline said it has completed the first tranche of a capital infusion of ₹744 crore and has additional subscriptions pending regulatory approval.

SpiceJet also said it has initiated a process to raise an additional ₹1,500 crore and has shareholder approval to raise up to ₹2,500 crore through a QIP. As part of a turnaround and cost-cutting strategy, the airline said it has implemented manpower rationalisation and anticipates annual savings of up to ₹100 crore from that initiative.

Key facts at a glance

What investors and employees will track next

Near-term attention will remain on liquidity actions and whether additional funding materialises, including any outcome on the reported ECLGS request. Another key variable is operational continuity, given the reliance on a smaller fleet and wet-lease capacity. Workforce stability will also be watched closely as furloughs, salary delays and engineering exits can affect reliability and schedules.

SpiceJet’s statement points to planned fundraising and cost cuts, but the reports indicate that employee payments and statutory dues are already under strain. Any further announcements on route changes, fleet availability, and the timeline for capital raising are likely to shape how markets and stakeholders assess the airline’s immediate operating outlook.

First published: Apr 18, 2026 | 11:49 AM IST