Salary cuts for Air India, IndiGo staff as coronavirus clips aviation sector’s wings

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Published: March 19, 2020 3:36:58 PM

As coronavirus continues its toll on India’s aviation industry, the pain has now reached the employees, with two of the largest carriers talking about cutting salaries.

Many countries, including India, have imposed restrictions on flights to and from various other nations, in the wake of coronavirus outbreak. (Representative image)Many countries, including India, have imposed restrictions on flights to and from various other nations, in the wake of coronavirus outbreak. (Representative image)

As coronavirus continues its toll on India’s aviation industry, the pain has now reached the employees, with two of the largest carriers talking about cutting salaries. Senior management of budget carrier IndiGo will bear a pay cut in their salary with CEO Ronojoy Dutta also taking 25% lesser salary starting next month. The airline will pay less salaries to its senior employees as revenues start drying up. “With the precipitous drop in revenues, the very survival of the airline industry is now at stake,” Ronojoy Dutta said in his email to employees, PTI reported. The airline fears that it will soon run out of the cash if it does not keep the cash outflow in check. National carrier Air India is also mulling on salary cuts by 5% amid growing financial woes, sources said, the news agency reported. Earlier, an industry advisor had said that most airlines are staring at bankruptcy by May-end if the coronavirus situation persists. 

How deep is the aviation sector’s problem?

With the governments across the world imposing travel restrictions, the aviation industry is one of the most hard hit sectors by coronavirus. In fact, a leading UK airline Flybe has already collapsed due to demand slump amid passengers. The situation at home is no different and along with aviation, travel and tourism are also expected to take a hit. According to estimates by the Indian Association of Tour Operators, these three industries are likely to sustain a blow of Rs 8,500 crore. 

Meanwhile, Air India is already in troubles with its enormous debt. The cash strapped airline is also awaiting privatization as the government looks to offload 100% of its stake in the airline. Air India now is also considering various cost-cutting measures such as taking off from flying its over 100 reemployed pilots on contract, according to sources, PTI reported. Apart from airlines, various other industries such as media and entertainment and restaurants are also expected to report major revenue loss as the government shuts down public spaces.

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