Crisis forces IndiGo to cut pay Ronojoy Dutta, chief executive of the airline, will take the biggest pay cut of 25%

TT, 20.03.20, New Delhi: IndiGo, the country’s largest airline, has announced pay cuts for its employees to pare costs as it struggles to deal with the downturn in the coronavirus-ravaged aviation sector.

Ronojoy Dutta, chief executive of the airline, will take the biggest pay cut of 25 per cent.

In a mail to employees, he said senior vice-presidents and those above would take a pay cut of 20 per cent. Vice-presidents and pilots will take a cut of 15 per cent while the salaries of cabin crew, assistant vice-presidents and B and D employees would be reduced by 10 per cent.

The salary cuts will come into effect from April 1.

Industry association CII has asked its member companies not to lay off their employees. 

IndiGo is the largest airline in the country with a market share of nearly 50 per cent.

“With the precipitous drop in revenues, the very survival of the airline industry is now at stake….,” Dutta said.

He said: “We know how hard it is for families to take a cut in take-home pay. But unfortunately, it is impossible for our company to fly through this economic storm without all of us making some sacrifices. We wish to emerge out of this crisis stronger, wiser and more resolute as an institution than when we entered into this crisis in February.”

“We have to pay careful attention to our cash flow so that we don't run out of cash,” Dutta told his employees.

Dutta added that the airline was drawing up plans to determine how it should respond to the travel needs of its customers. IndiGo will interact with its suppliers and decide how to deal with the temporary cutback in capacity.

“We will be extremely responsible in terms of safeguarding the health needs of our community,” Dutta added.

The state-owned Air India may cut the salary of employees by 5 per cent amid its growing financial woes. The airline has grounded almost all its international flights in the wake of the coronavirus scare.

The salary cuts at Air India are likely to be across the board, officials said.

The loss-making airline, which is making its second attempt at privatisation, had failed to find a single buyer nearly two years ago.

Since then, it has adopted a variety of cost-cutting measures that include a reduction in flying allowances of the cabin crew and withdrawal of entertainment allowance given to executive pilots.

As per global aviation consultancy CAPA, the private domestic carriers are expected to post a consolidated loss of up to Rs 4,500 crore in the first quarter of the current year.

Reports suggest that Indian airlines may ground as many as 150 aircraft as the government restricts travel amid the Covid-19 outbreak. This figure may rise after the government decided to ban all international flights from March 22 for one week.