The management has now decided to reverse this decision and implement pay-cuts instead, a person aware of the matter said.
India’s fourth largest airline GoAir will be cutting salaries across the board for its entire staff for the month of March, sources said. Last week, the airline was the first Indian carrier to send some of its staff on unpaid leave as the outbreak of the novel Coronavirus (Covid-19) crippled the aviation industry. The management has now decided to reverse this decision and implement pay-cuts instead, a person aware of the matter said. Airlines will have to find ways to manage costs as India has grounded all passenger flights for at least 21 days starting Tuesday.
Salaries will be cut for all employees, but the percentage will be larger for the top level management, the person said. “It makes more sense for everyone to take salary cuts instead of sending some on rotational leave without pay. How much will be cut will depend on the pay grade, with the top level taking higher cuts. Our overhead costs are fixed but flights are grounded for 21 days at least. All airlines, not just GoAir, will have to take tough calls,” the person said. Airlines have sought the government’s support to be able to continue paying salaries while passenger operations remain suspended, the person added.
Tata Group-promoted Vistara, on the other hand, has already released salaries for the month of March on Tuesday, a person with knowledge of the matter said. Last week, India’s largest airline IndiGo also introduced salary cuts for most of its employees, with CEO Ronojoy Dutta taking a 25% pay-cut.
The government has stopped all but essential travel through road, railways and air, starting from Tuesday midnight, to limit the spread of Covid-19. Globally, airlines have taken a massive hit due to travel curbs in the wake of the pandemic, which has so far claimed more than more than 16,000 lives. The International Air Transport Association has estimated a global air passenger revenue loss of over $250 billion as a result of the disruptions.