Covid imapct: Fear of airlines going bust
Budget carrier IndiGo’s decision to retrench 10 per cent of its total workforce because of the impact of the coronavirus pandemic is the “beginning” of a “painful” process and in the prevailing conditions, the possibility of one or more airlines going out of business cannot be ruled out, according to CAPA India.
Besides, third-party investors are unlikely to invest in any airline under the present conditions, and the companies have the only option to seek capital infusion from promoters, it said.
IndiGo, which is the largest carrier by domestic market share, on Monday said it plans to hand over pink slips to 10 per cent of its 23,500-strong workforce amid a lack of demand because of travel restrictions.
“The decision by IndiGo to lay off 10 per cent of its staff is the beginning of a painful process for Indian aviation... It will be impossible to survive this crisis without a strong balance sheet (for the domestic airlines),” CAPA India said in a tweet on Tuesday.
SpiceJet on Tuesday said it has acqui-hired the team and technology of Travenues, a Bangalore-based airline e-commerce technology firm. Travenues is a wholly-owned subsidiary of online travel platform ixigo.
In acqui-hiring, a new concept in the tech industry, the employees of a company are recruited rather than gaining the control of its products or services. The technology team of Travenues has joined SpiceJet as part of this deal.
“We are glad to welcome team Travenues to SpiceJet. This acqui-hire will help SpiceJet strengthen its e-commerce platforms as we continue to innovate across multiple technology areas and achieve our vision of being the worldwide leader in aviation technology,” said Ashish Vikram, chief technology and innovation officer, SpiceJet.