SpiceJet Ltd. is putting 150 cabin crew on temporary leave without pay for three months as the embattled Indian airline tries to raise capital from institutional investors to fund its operations. 

“This step has been taken in response to the current lean travel season and the reduced fleet size, with the long-term stability of the organization in mind,” a spokesperson said in a statement late Thursday.

SpiceJet said last month that it’s seeking to raise as much as ₹30 billion ($358 million) via a share sale but hasn’t announced any time frame. The beleagured carrier reported a 27 per cent drop in net income for the first quarter to ₹1.5 billion while revenue sunk 15 per cent year-on-year.

The staff furlough comes after India’s aviation regulator the Director General of Civil Aviation placed SpiceJet under enhanced surveillance to ensure that its poor financial health doesn’t impact safety, The Hindu reported, citing a senior DGCA official.

SpiceJet said in its statement that crew members will continue to retain their status as employees. The budget airline is still flying but its market share in July fell to just 3.1 per cent. It used to command around 15% of the market just prior to Covid in 2020.

The airline’s auditors have also raised concerns over SpiceJet’s non-compliance with various regulations, including delays in tax payments, and overdue foreign currency trade receivables and payables.

SpiceJet hasn’t made mandatory staff social security Provident Fund payments since January 2022 in another sign of its cash crunch, CNBC-TV18 reported in July.

SpiceJet operates a fleet of mostly Boeing Co.’s 737 jets, many of which are grounded as it’s struggled to pay lessors. It had a fleet of 110 before the pandemic, according to its annual report, although now only around 20 are flying.

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