IndiGo to implement wider pay cuts, send some staff on leave without pay

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Published: May 9, 2020 2:30 AM

While senior-vice presidents and above would have 20% of their pay slashed, vice-presidents and cockpit crew would take a 15% cut.

IndiGo had initially planned to cut salaries between 10% and 25% for April. (File image)IndiGo had initially planned to cut salaries between 10% and 25% for April. (File image)

India’s largest airline IndiGo will be implementing wider pay cuts and send some staff on ‘leave without pay’ from May to July, CEO Ronojoy Dutta told employees in an email on Friday. In March, the airline had announced pay cuts for most of its staff for April, but later reversed the decision. “While we have paid our employees salaries in full for the months of March and April… we are left with no option but to implement the originally announced pay cuts for the months of May, June and July,” Dutta told employees.

IndiGo had initially planned to cut salaries between 10% and 25% for April. While senior-vice presidents and above would have 20% of their pay slashed, vice-presidents and cockpit crew would take a 15% cut. Salaries of assistant vice-presidents and cabin crew would be cut by 10%. This structure would be followed for May-July, a person aware of the matter said.

IndiGo will also send some of its employees on a “limited, graded leave without pay program” during May-July. “The leave without pay will range from 1.5 days to 5 days depending on the employees group. While doing so we will make sure that the level A employees, who form a majority of our workforce, will not be impacted,” Dutta said. He told employees that the cuts were necessary because the passenger operations are likely to resume with “much lower capacity initially and gradually build up capacity in succeeding months”.

Other domestic airlines have also cut employee costs amid tepid revenues. GoAir delayed April salaries and sent 60% of its staff on leave without pay. Meanwhile, SpiceJet implemented pay cuts in March and will not pay most of its pilots for April-May. Air India staff saw a cut in allowances, while Vistara also sent senior management on compulsory leave without pay for up to four days in May-June.

Commercial passenger flights have been suspended since March 25 in the wake of the Covid-19 pandemic. Commercial flights are currently suspended till May 17 in India. The aviation industry is expected to see revenue losses to the tune of Rs 25,000 crore in FY20, Crisil said adding that airlines will be the worst affected and bear over 70% of the losses. Airlines globally are struggling to stay afloat as the pandemic has slowed economic activity to a crawl. The International Air Transport Association estimates the revenue loss for airlines globally at around $314 billion in 2020.

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