Kalanithi Maran-promoted SpiceJet will raise monthly salaries of it’s around 100 senior commanders by up to Rs 80,000 on average from July 1, in a move to counter increased attempts by new players such as Etihad, AirAsia and Tata-SIA to poach highly-skilled commanders from the incumbents, industry sources said.
This is part of a wage hike plan for across the carrier’s cabin crew and its approximately 400 pilots. The industry’s average monthly wage for senior commanders is Rs 5.3 lakh but at SpiceJet it is lower, at about Rs 4.5 lakh. The wage increase will be a combination of fixed and variable pay, though the larger increase will be in the fixed pay component.
Sanjiv Kapoor, SpiceJet’s COO told FE, “The wage rate increase for pilots would be made up through improved productivity, better rostering, etc, and so it would be largely cost neutral. This will help us retain employees, and boost morales, as we work on turning around the business”.
He added, “Previous reports that SpiceJet is planning major job cuts is incorrect. Cutting jobs, especially for non-pilot staff, will not be the major sources of savings for us. There are other cost areas that are quite high and need to be addressed.”
In FY14, SpiceJet’s wage bill (employee benefits expense) as a percentage of net sales fell to 9.13% from 9.4% in the previous fiscal. Absolute wages though rose 9.3% to R576 crore in FY14. SpiceJet posted a record net loss of Rs 1,003 crore in FY14 on the back of currency depreciation and high fuel costs, even as total income went up 11.5% to Rs 6,356 crore.
SpiceJet shares closed 12.83% up at Rs 21.10 on Friday, on the back of a media report that Qatar Airways is likely to purchase SpiceJet’s parking slots overseas.
SpiceJet, however, strongly denied any such development while clarifying to the BSE, “the Company denies having any discussion with Qatar Airways for the sale of overseas slots, as reported. We also confirm that there is no truth whatsoever in the scheduling of a meeting to discuss investment plans with Qatar Airways”.
By Roudra Bhattacharya | Financial Express
For all the latest India News, download Indian Express App nowFirst Published on: May 24, 2014 1:28 am