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Indian budget airline SpiceJet costcutting prunes expat pilots
| Published: | 23 Jan at 6 PM |
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Tagged: South Africa, India
After two consecutive years of posting operating losses, Indian low-cost carrier SpiceJet is planning to slash the number of its expat pilots in a bid to return to profitability.
Beginning immediately, the company will operate all flights of their Boeing 737 fleet with local pilots, and are introducing other cost-cutting measures such as changes in flight crew schedules. The only foreign pilots to be retained will fly its 15 turbo-prop Bombardier Inc. Q400 planes.
According to SpiceJet’s CEO, South African Neil Mills, the expat pilots have helped the airline to grow and supported its expansion, but are now costing far too much. Typically, overseas nationals working in India’s aviation sector are paid around 40 per cent more than local employees, with the figure including tax liabilities.
The rising cost of aviation fuel, competition, government levies and a decrease in demand have forced other Indian carriers such as Jet Airways and Air India to trim their budgets with a heavy hand. In 2012, SpiceJet’s shares more than doubled due to a rumour that billionaire owner Kalanithi Maran was abut to sell a stake to an overseas buyer following the relaxation of rules covering foreign investments.
At present, SpiceJet employs 60 expatriate pilots specifically for its Boeing fleet of 36 aircraft, and is planning to purchase a further seven in 2013. It remains to be seen whether the loss of foreign pilots and other changes affects the security of the fleet, given the recent Financial Times report on safety violations in India’s airlines.
Beginning immediately, the company will operate all flights of their Boeing 737 fleet with local pilots, and are introducing other cost-cutting measures such as changes in flight crew schedules. The only foreign pilots to be retained will fly its 15 turbo-prop Bombardier Inc. Q400 planes.
According to SpiceJet’s CEO, South African Neil Mills, the expat pilots have helped the airline to grow and supported its expansion, but are now costing far too much. Typically, overseas nationals working in India’s aviation sector are paid around 40 per cent more than local employees, with the figure including tax liabilities.
The rising cost of aviation fuel, competition, government levies and a decrease in demand have forced other Indian carriers such as Jet Airways and Air India to trim their budgets with a heavy hand. In 2012, SpiceJet’s shares more than doubled due to a rumour that billionaire owner Kalanithi Maran was abut to sell a stake to an overseas buyer following the relaxation of rules covering foreign investments.
At present, SpiceJet employs 60 expatriate pilots specifically for its Boeing fleet of 36 aircraft, and is planning to purchase a further seven in 2013. It remains to be seen whether the loss of foreign pilots and other changes affects the security of the fleet, given the recent Financial Times report on safety violations in India’s airlines.
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