India’s Top Airline Cuts Staff 10% in Bow to Virus Impact
Those losing their posts will be paid severance equivalent to at least three months of salary and other benefits, IndiGo said.
(Bloomberg) -- IndiGo, one of the world’s fastest-growing airlines before the coronavirus pandemic, will cut 10% of its workforce in a concession to the crisis that’s upended travel around the world.
The Indian carrier, operated by InterGlobe Aviation Ltd., said in a statement Monday that the disease has made it “impossible for our company to fly through this economic storm without making some sacrifices.”
The cuts could cost 2,700 jobs based on the airline’s total payroll, though it didn’t provide a number.
IndiGo, which controls more than 50% of the Indian market, has been viewed as one of the industry’s healthier carriers, with enough liquidity to withstand a downturn for several months. Its move suggests that weaker airlines will have to take more drastic measures.
The company, owned by billionaires Rahul Bhatia and Rakesh Gangwal, is the biggest customer in the world for Airbus SE’s best-selling A320neo jets, and so far has been among the handful of airlines to keep accepting new aircraft deliveries on schedule.
IndiGo plans to raise 30 billion rupees ($400 million) to augment its balance sheet and prepare for future growth, the Business Standard reported earlier.
Managing Cash
The outbreak has stifled tourism and forced business customers to cut back on non-essential trips, triggering an unprecedented travel slump. Airlines from Africa to Australia have entered administration or shut down as the industry is deprived of revenue and struggles to rein in costs.
At Indigo, the workers losing their posts will be paid severance equivalent to at least three months of salary and other benefits, the company said in a statement.
“This is indeed a very unfortunate turn of events,” the company said in a statement. “This pandemic has forced us to re-evaluate.”
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