Airline Companies introduce “Pay-cuts” and “Leave Without Pay” amid the lockdown

Story Highlights
  • The aviation sector has been hit hard due to the suspension of all commercial passenger flights due to lockdown
  • Indigo, Vistara, GoAir, Spicejet begin to cut corners

INDIA: Ronojoy Dutta, the CEO of IndiGo said that the airline company will cut salaries of senior employees from May onwards and it will also implement a “limited, graded leave without pay program” for them during the months of May, June and July.

Amid the lockdown due to the coronavirus pandemic that began from 25 March, the aviation sector has been hit hard due to the suspension of all commercial passenger flights. Till any further order, the bookings for flights remain closed. Consequently, there is no significant business being done by the company.

In an email sent to the employees of the company, the CEO stated, “While we had paid employee salaries in full for the months of March and April, I am afraid that we are left with no option but to implement the originally announced pay-cuts from the month of May 2020.”

Earlier, on 19th March, there was an announcement of pay cuts for its senior employees by IndiGo. However, on March 23, the Centre had asked public and private sector companies not to cut salaries or lay off employees during the COVID-19 lockdown. Therefore, the decision was rolled back on April 23 in consideration to the Centre’s request.

On Friday, in his email Dutta further said, “In addition to pay cuts, given the gradual build-up of capacity, I am afraid we have to take the additional painful step of implementing a limited, graded leave without pay program for the months of May, June and July.”

“This leave without pay will range from 1.5 days to 5 days depending on the employee group. While doing so, we will make sure that Level A employees, who form a majority of our workforce, will not be impacted,” he said.

Dutta said, “As you all know, our operations have been pretty much grounded ever since March 25, 2020, except for a few rescue and cargo flights, resulting in practically no revenues since then.”

“In addition, as and when we resume operations, it is likely that the airline will start with a much lower capacity initially and gradually build up capacity in succeeding months,” he noted.

Meanwhile, all Indian airlines are implementing cost-cutting measures like pay cuts due to the drastic decline in revenue. AirAsia India has cut salaries of its senior employees by up to 20 per cent, while Air India has cut salaries for its staff by 10 per cent. SpiceJet has cut salaries of mid and senior level employees by 10-30 per cent.

Vistara has introduced a mandatory unpaid leave for up to six days in April for its senior employees. The same set of senior employees will go on leave without pay for up to four days each month in May & June as well. Similarly, GoAir has sent the majority of its employees on leave without pay till May-end.

As the majority of aircraft with Indian airlines are on lease, they are currently seeking deferral of lease rentals by six months.

While no commercial passenger flights can fly during the lockdown period, cargo flights, medical evacuation flights and special flights are allowed to operate as permitted by the Directorate General of Civil Aviation (DGCA).

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