India’s Biggest Airline Reverses Pay Cuts Despite Virus Pressure
(Bloomberg) -- IndiGo, Asia’s biggest budget airline by market value, has reversed a decision to slash employee salaries after the Indian government urged companies to avoid such practices, according to people with direct knowledge of the matter.
The airline, operated by InterGlobe Aviation Ltd., had proposed pay cuts of as much as 15% for most staff but will no longer go through with them, the people said, asking not to be identified as the decision isn’t public. Top management will, however, take as much as a 25% reduction in pay, the people said.
IndiGo’s move stands out at a time when airlines throughout the world are cutting operations, furloughing staff or even collapsing completely as the coronavirus pandemic brings the industry to its knees. Passenger numbers have slumped globally and carriers have slashed seat capacity on domestic and international routes. In India, airlines aren’t allowed to fly at all while the nation is in lockdown until at least May 3.
A representative for IndiGo, which had cash and cash equivalents of 200 billion rupees ($2.6 billion) at the end of December, didn’t immediately respond to a request for comment. IndiGo’s employee costs for the three months ended Dec. 31 were 12.5 billion rupees, according to its quarterly earnings report.
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