Indigo announces salary cuts from April amid falling revenue
NEWDELHI: Indigo, India’s largest domestic airline, will cut salaries of a section of its employees as the Covid-19 pandemic severely curtails global demand for air travel. In a communication to its staff on Thursday, Interglobe Aviation Ltd, which operates Indigo, said the salary cuts are being done in line with falling revenue.
“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,” Indigo’s chief executive officer (CEO) Ronojoy Dutta said in an internal email, reviewed by Mint. A spokesperson for the airline confirmed Dutta’s email but declined to elaborate.
“I am personally taking a 25% pay cut, SVPS (senior vice president) and above are taking 20%, VPS and cockpit crew are taking a 15% pay cut, AVPS, Bands D along with cabin crew will take 10% and Band Cs 5%,” Dutta told the employees.
Globally, more than 8,960 people have died due to Covid-19, while the number of those infected crossed 219,347 cases, according to the latest data by Johns Hopkins University. Many governments, including the US and India, have implemented temporary travel bans.
Most Indian airlines have cancelled a large number of international and domestic flights as travel restrictions and worries over the viral disease hit transport and tourism sectors.
Aviation consultancy Capa India said Indian carriers may be forced to ground as many as 150 planes due to the prevailing situation in the airline industry.
“...even before Covid-19 appeared on the scene, most Indian carriers already had very strained balance sheets and almost no liquidity. This latest shock will once again expose the vulnerability of India’s aviation system as happened during the fuel price spike in 2008,” Capa India said in a report titled ‘Impact of Covid-19 on Indian aviation’ on Wednesday. “But, on that occasion, the shock was short-lived. This time, the shock itself will be far deeper and much longer,” it added.
Indigo is not the only Indian carrier that is taking extraordinary measures in the ongoing crisis situation. Wadia Group-controlled budget airline Goair had on March 17 asked a section of its employees to go on short leave without pay. Government-owned Air India might cut employee salaries by 5%, reported PTI earlier in the day.
Indigo, Air India and Spicejet have cancelled a large portion of international flights. Airlines like Vistara and Goair have, meanwhile, suspended their international operations completely for a short duration.
Industry lobby group The International Air Transport Association (IATA) has warned that the pandemic, if not contained, could cost airlines globally as much as $113 billion in revenue loss.
Meanwhile, Qantas Airways told most of its 30,000 staff to take leave, and Delta Air Lines said on Wednesday it would park more than 600 jets, cut corporate pay by as much as a half, and scale back flying by more than 70% until demand begins to recover.
Reuters & PTI contributed to this story.