Regional airline Flybig facing huge headwinds six months after launch

Forum Gandhi Mumbai | Updated on July 21, 2021

Sanjay Mandavia

New investors may be roped in to tide over financial stress

Regional airline Flybig is facing severe headwinds six months after it was launched.

According to sources, the airline is struggling to stay afloat because of which it has had to defer salary payments and induction of aircraft. At least three top management personnel have quit the company recently.

The airline was launched by former pilot Sanjay Mandavia in January after he lost out a bid to acquire Jet Airways under the insolvency process. At the time of launch, Mandavia had planned for FlyBig to be the UDAN-4 leader this year, and induct at least five aircraft. He was even confident that despite the Covid-19 pandemic, the airline would succeed.

“We are the only new airline post Covid, at least in this side of the world. We are sure that the industry will bounce back. If we start at this time, it will be a blessing in disguise,” he had said.

However, six months later only one aircraft is operational. In fact, the passenger load factor is so low that the airline is not able to recover its expenses.

Flybig had appointed Srinivas Rao as the CEO, Rajarshi Sen as the Chief Financial Officer. BusinessLine has learned that both of them have tendered their resignations.

Salary payment hit

Some of the employees took to Twitter to vent their anger last month. Under the Twitter handle ‘flybig employees forum’, a tweet said: “Employees of flybig have not been paid salaries for the past 3 months, families and employees suffering, taxes not paid, owner and directors of flybig airline want to fill their own pocket. Government should strictly check the company's background.”

Flybig and Mandavia did not respond to queries sent by BusinessLine.

One company source said the employees were being paid 50 per cent of their salary. However, another staff member said that there has been a delay in paying salaries even with the cut.

The reason, according to multiple sources, is that Mandavia wasn’t able to secure funding for the past few months. Speaking to BusinessLine, Mandavia had said that he was approaching PE investors and VC investors to raise ₹100 crore but that didn’t happen till the second week of July. BusinessLine has now learned that the airline is in the final stages of onboarding a new investor which could provide relief.

Published on July 21, 2021

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