IndiGo Announces ‘Deeper’ Pay Cuts Of Up To 35% For Senior Employees
InterGlobe Aviation Ltd.’s IndiGo airlines is implementing "deeper" pay cuts of up to 35% for its senior employees to reduce its cash outflow amid the coronavirus pandemic.
From May onwards, IndiGo had implemented pay cuts of up to 25% for its senior employees.
The "deeper" pay cuts came after the airline's announcement on July 20 that it would lay off 10% of its workforce due to the economic crisis caused by the pandemic.
In an e-mail on Monday, IndiGo Chief Executive Ronojoy Dutta told employees, "I will increase my personal pay cut percentage to 35%. I am asking all senior vice presidents and above to take a 30% pay cut, all pilots will see their pay cut percentages increased to 28%, all vice presidents will take a 25% pay cut and associate vice presidents will take a 15% pay cut."
These increased pay cuts will come into effect from September 1, he added.
The aviation sector has been significantly impacted due to the travel restrictions imposed in India and other countries in view of the coronavirus pandemic. All airlines in India have taken cost-cutting measures such as pay cuts, leave-without-pay and lay-offs in order to conserve cash.
Before Monday's announcement, IndiGo CEO Dutta took a 25% cut in salaries. For senior vice presidents the pay cut was 20%, for vice presidents it was 15% and for associate vice presidents it was 10%.
In May, IndiGo had also cut the salaries of ‘Band D’ employees and cabin crew members by 10%, and of ‘Band C’ employees by 5%.
Salaries of employees in ‘Band B’ and ‘Band A’ were unchanged. Majority of the employees of the airline are in ‘Band B’ and ‘Band A’.
Dutta's Monday announcement does not affect the cuts instituted in the salaries of ‘Band D’ employees, Band C employees and cabin crew members in May. Moreover, no cuts were announced on Monday for ‘Band B’ and ‘Band A’ employees.
IndiGo in May had also implemented a compulsory leave without pay scheme for its employees for up to five days per month. In August it was increased to 10.5 days per month.
Dutta said on Monday, "We are not making any changes for August LWP and from September each department will decide on the LWP for each month based on workloads and staffing levels."
"You can expect a direct communication from your department head on LWP each month. It is my earnest hope that the environment is conducive enough for us to add capacity back quickly and reduce LWP to zero," he added.
India resumed domestic passenger flights from May 25 after a gap of two months due to the coronavirus pandemic. However, the airlines have been allowed to operate only a maximum of 45% of their pre-Covid domestic flights.
Occupancy rate in Indian domestic flights has been around just 50-60% since May 25.
Scheduled international passenger flights continue to remain suspended in India since March 23.