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 5-25 per cent. All the changes in salaries will come into effect from April 1, 2020.
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 a great deal of reluctance and a deep sense of regret we are therefore instituting pay cuts for all employees, excluding Bands A & B, starting April 1, 2020. I am personally taking a 25 per cent pay cut, SVPs and above are taking 20 per cent, VPs & cockpit crew are taking a 15 per cent pay cut, AVPs, Bands D along with cabin crew will take 10 per cent and Band Cs 5 per cent. Vice-Presidents and pilots are to take a pay cut of 15 per cent while salaries of cabin crew, AVPs and Band D employees will be reduced by 10 per cent with effect from April 1," IndiGo CEO Ronojoy Dutta said in an email. Band C employees will take a pay cut of 5 per cent, IndiGo CEO informed, adding that there will be no salary cuts for band A and B.
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 re-employed 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)