Private airlines IndiGo has decided to slash salaries of all employees to counter drop in revenues as aviation businesses across the globe have been hit amid the spread of coronavirus. All the employees, including the CEO, senior vice presidents and cockpit crew will see a salary cut in the range of 15-25 per cent.
While IndiGo CEO Ronojoy Dutta will see his salary slashed by 25 per cent, the cockpit crew will take a 15 per cent pay cut. Those in the post of senior vice presidents and above in IndiGo will take a 20 per cent pay cut. "With precipitous drop in revenues, the very survival of airline industry now at stake," IndiGo CEO Ronojoy Dutta said while announcing pay cut. IndiGo is the largest airline in India as per market share.
Earlier in the day, IndiGo's flight operations chief Ashim Mitra, in an email to pilots, had indicated about the need to take "tough decisions over the next few days and weeks." "Economic environment has deteriorated significantly and no airline is insulated from this severe downturn. It has become a necessity to initiate some tough calls and we are working on a string of measures that will be shared and implemented over the next few days and weeks," Mitra said.
While only IndiGo has made their decisions public, government-owned Air India might soon follow the suit, according to PTI. Air India may cut salary of employees by 5 per cent amid its growing financial woes particularly in the wake of the coronavirus pandemic, which has nearly grounded its entire international operations. "Air India is considering a 5 per cent pay cut to its employees as it faces huge financial crisis due to the ongoing coronavirus outbreak, which has brought almost its entire international operations save the US, Canada and a few other markets, to the ground," a source told PTI. The salary reduction will be across the board.
The carrier has also reportedly decided to take off from flying its over 100 reemployed pilots on contract as part of various cost cutting measures.
The loss-making airline, which is in the process of a second attempt of privatisation after failing to get a single buyer nearly two years ago, has already taken some steps such as reduced flying allowances to cabin crew besides withdrawing entertainment allowance to executive pilots, among others.
On Tuesday, the airline issued a circular stating that it is withdrawing entertainment allowance to executive pilots. It also said that all cabin crew including on contract rostered for flying duties from April 1 will have revised layover allowance of $100 for 30 hours and after that $4 for every additional hour. In case of ultra long haul flights, it has been revised to $140 for 30 hours and after that $6 for every additional hour of flight.
The fuel allowance is also being cut by 10 per cent for six months, effective April 1, it said. The airline said such measures are being taken keeping in view the financial position of the company in the wake of the recent global development.''
(With PTI inputs)
