SpiceJet chairman and managing director Ajay Singh has received an advance payment of Rs 32 crore from the budget airline. The interest-free amount to Singh is almost equivalent to the salary for his next five years.
It will be adjusted from his salary, SpiceJet said in its FY25 annual report.
This advance payment to Singh is in addition to the Rs 7.2 crore paid to Singh as remuneration for FY 25.
A SpiceJet spokesperson said the advance was extended in line with policies and is not prejudicial to the interest of the company.
“This was not a grant or a special dispensation but a simple advance as per policy, which is being adjusted from monthly salary. The advance is being already repaid, and the balance continues to be recovered in a structured manner,” the spokesperson said.
SpiceJet’s advance payment to its promoter comes at a time when the airline is struggling financially with more than half of its fleet grounded, hindering its ability to compete against rivals besides squeezing operational cash flows. The airline’s market share in the domestic sector fell to a historic low of 1.9% in July.
While SpiceJet had raised Rs 3,000 crore from institutional investors last year and had promised to scale up to 40 aircraft by March, further increasing it to 100 by 2026-end, it hasn’t been able to do so due to supply chain shortage and parts supplier and lessors turning cautious due to the airline’s pending dues.
Out of the 54 aircraft in its fleet, it has only 21 aircraft operating, and is left with only Rs 333 crore in free cash as of June-end. A large portion of that has been used primarily for clearing statutory dues like goods and services tax (GST), tax deducted at source (TDS), and provident fund.
The spokesperson said all dues concerning provident fund and TDS have been cleared.
“Promoter taking advance salary when the company is under financial stress is not a good governance practice. The board can put out a dissent note in such cases,” said Shriram Subramanian, MD of proxy advisory firm InGovern Research.
The financial troubles have also been hampering SpiceJet’s daily operations with its on-time performance being the poorest and cancellation rate the highest among all airlines in July. It has a token presence on top metro routes like Delhi-Mumbai.
SpiceJet said it has been able to settle with lessors and business partners. For a few lessors, it has been able to restructure their debt into equity. On Monday, it said that it has completed a payment of $24 million to Credit Suisse as part of its settlement agreed upon in May 2022.
The airline is also trying to increase capacity in the upcoming festival and year-end season by inducting 10 Boeing 737 aircraft on short-term lease.
It will be adjusted from his salary, SpiceJet said in its FY25 annual report.
This advance payment to Singh is in addition to the Rs 7.2 crore paid to Singh as remuneration for FY 25.
A SpiceJet spokesperson said the advance was extended in line with policies and is not prejudicial to the interest of the company.
“This was not a grant or a special dispensation but a simple advance as per policy, which is being adjusted from monthly salary. The advance is being already repaid, and the balance continues to be recovered in a structured manner,” the spokesperson said.
SpiceJet’s advance payment to its promoter comes at a time when the airline is struggling financially with more than half of its fleet grounded, hindering its ability to compete against rivals besides squeezing operational cash flows. The airline’s market share in the domestic sector fell to a historic low of 1.9% in July.
While SpiceJet had raised Rs 3,000 crore from institutional investors last year and had promised to scale up to 40 aircraft by March, further increasing it to 100 by 2026-end, it hasn’t been able to do so due to supply chain shortage and parts supplier and lessors turning cautious due to the airline’s pending dues.
Out of the 54 aircraft in its fleet, it has only 21 aircraft operating, and is left with only Rs 333 crore in free cash as of June-end. A large portion of that has been used primarily for clearing statutory dues like goods and services tax (GST), tax deducted at source (TDS), and provident fund.
The spokesperson said all dues concerning provident fund and TDS have been cleared.
“Promoter taking advance salary when the company is under financial stress is not a good governance practice. The board can put out a dissent note in such cases,” said Shriram Subramanian, MD of proxy advisory firm InGovern Research.
The financial troubles have also been hampering SpiceJet’s daily operations with its on-time performance being the poorest and cancellation rate the highest among all airlines in July. It has a token presence on top metro routes like Delhi-Mumbai.
SpiceJet said it has been able to settle with lessors and business partners. For a few lessors, it has been able to restructure their debt into equity. On Monday, it said that it has completed a payment of $24 million to Credit Suisse as part of its settlement agreed upon in May 2022.
The airline is also trying to increase capacity in the upcoming festival and year-end season by inducting 10 Boeing 737 aircraft on short-term lease.
You may also like
Wayne Rooney's son Kai shares devastated message - 'Life can't get worse'
Kharghar Police Probe Hit-and-Run After 73-Year-Old's Death Initially Declared Accidental
EastEnders fans predict death of fan favourite amid dark blackmail storyline
Hot weather maps show exact date 23C heat returns to England - 22 hottest counties
Conservative activist Charlie Kirk shot at Utah Valley University. He was answering a question on mass shooting
