Ex-SpiceJet Pilots Seek Bankruptcy Over ₹3 Crore in Unpaid Wages

Former SpiceJet Pilots File Bankruptcy Petition Amid Ongoing Financial Struggles

In a significant development for the airline industry, two former SpiceJet pilots have filed a bankruptcy petition against the airline, claiming unpaid dues totaling ₹3 crore. This case further emphasizes SpiceJet’s ongoing financial challenges and legal disputes, which have resulted in multiple insolvency claims against the company.

The National Company Law Tribunal (NCLT) is currently reviewing the petition, which alleges non-payment of salaries, allowances, and overtime. As of now, the tribunal has not issued a notice, and SpiceJet has categorically denied the claims, labeling them as baseless.

Former SpiceJet Pilots’ Bankruptcy Petition

Captains Sameer Breja and Karan Gupta, who began their careers at SpiceJet (SG) as first officers in 2011 and were promoted to captains in 2016, have initiated proceedings at the Delhi bench of the NCLT under Section 9 of the Insolvency and Bankruptcy Code (IBC). Their petition specifies that the airline owes them ₹1.21 crore and ₹1.31 crore, respectively.

The dispute arose in 2020 when SpiceJet implemented salary cuts in response to the COVID-19 pandemic. The airline had initially assured employees that deferred payments would be made once operations normalized. However, the company later set a condition of achieving 26,000 monthly flight hours to trigger these payments—a benchmark the pilots argue was arbitrary and undisclosed during their employment.

The petition also alleges that the airline retroactively revised their compensation in June 2020, further decreasing their pay. The pilots claim they had no choice but to accept these changes and that SpiceJet failed to honor even the revised agreements upon their resignation in 2023.

NCLT’s Initial Response to the Case

During the hearing on February 4, the NCLT stated that it is “neither a labour court nor a writ court,” indicating that the petition might serve as a pressure tactic for payment. The tribunal has adjourned the case until March 7 without issuing a notice to SpiceJet.

Piyush Singh, managing partner at PSP Legal and representative for the pilots, expressed, “As SpiceJet did not pay the operational debt owed to us, we had no option but to initiate insolvency proceedings before the NCLT. A labour court was not an option since the dues exceed ₹1 crore.” Singh also mentioned that several other pilots have approached them with similar grievances, although their dues do not meet the ₹1 crore threshold for an insolvency plea.

SpiceJet’s Response to Allegations

A spokesperson for SpiceJet dismissed the claims as “baseless and frivolous,” asserting that the company has settled the dues of both employees. The spokesperson further stated, “They have been duly informed to complete the necessary documentation, following which the pending amount can be processed.”

This legal battle is part of a broader financial crisis facing SpiceJet. As of November 2024, the airline has faced at least 16 insolvency claims, primarily from aircraft lessors and vendors. To date, five cases have been settled, two are under negotiation, seven remain unresolved, and two have been dismissed. In a notable settlement, SpiceJet resolved a $16 million dispute with aircraft lessor Genesis and a $90.8 million claim from Export Development Canada for $22.5 million, allowing the airline to secure ownership of 13 Q400 aircraft.

Ongoing Challenges for SpiceJet

Since the pandemic, SpiceJet has struggled with financial instability, leading to a significant decline in its market share. According to the Directorate General of Civil Aviation (DGCA), the airline’s domestic market share plummeted from 7.3% in January 2023 to just 2.3% in August 2024. Currently, 36 of its aircraft remain grounded.

To stabilize operations, SpiceJet plans to reinstate 30 Boeing 737 MAX aircraft over the next 12-15 months. On January 29, the airline reintroduced its first ungrounded 737 MAX. Despite raising ₹3,000 crore through a qualified institutional placement, SpiceJet remains embroiled in legal disputes. Its ability to restructure debt and resolve creditor claims will be crucial for the airline’s future viability.

For further updates on SpiceJet’s financial situation and ongoing legal battles, stay tuned to our news section. We invite readers to share their thoughts on this matter or explore related articles for more insights.