After GoAir and SpiceJet, IndiGo cuts salaries for employees ⁠— CEO says there was ‘no other option’

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After GoAir and SpiceJet, IndiGo cuts salaries for employees ⁠— CEO says there was ‘no other option’
After GoAir and SpiceJet, IndiGo cuts salaries for employees ⁠— CEO says there was ‘no other option’Flickr

  • The low-cost airline announced that the cuts will be in effect for three months starting May.
  • CEO Ronojoy Dutta said that the cuts will range from 1.5-5 days depending on the employee group.
  • The company has paid full salaries to employees in March and April, PTI reported.
Airlines have been the worst-hit by the Coronavirus pandemic as both domestic and international travel has come to a halt due to closed borders.

Indian low-cost airline IndiGo today said that it will implement leave without pay for three months. According to PTI, CEO Ronojoy Dutta says that the company will now need to implement pay cuts for senior employees, starting this month.

"No option but to implement pay-cuts from the month of May. We have to implement a limited, graded leave without pay program for May, June & July. Leave without pay will range from 1.5-5 days depending on the employee group. Level A employees, who form a majority of our workforce will not be impacted,” Dutta said.
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The company paid full salaries to employees in March and April, according to the report.

This comes after IndiGo said that they would trim the employee salaries by 25%, starting next month — including CEO Ronojoy Dutta — stating ‘precipitous drop in revenues.’ Salaries account for over 10% of the total expenses for IndiGo — which spent ₹3,210 crore on paychecks last financial year.

IndiGo, India’s largest airline, had reported a 15-20% decline in daily bookings even before the lockdown had come into effect, chief executive for aviation consultancy CAPA India told ET on March 14.
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IndiGo is not alone. GoAir and Spicejet have also cut the employee salaries across roles for the month of March — including the chairman. Spicejet announced that it would cut 10%-30% of the salary of employees across roles in March. The airline also said that the pay cut applies to the Chairman Ajay Singh also, who will take 30% less pay for the month.

Meanwhile, GoAir too said that it will cut salaries across levels which said it had no other option. It also said the airline was planning a 20% pay cut for employees in a staggered manner.

Recently, the Indian aviation regulator Directorate General of Civil Aviation (DGCA) extended the validity of pilots’ licences that were up for renewal in the next 90 days as the lockdown has suspended the training of the flight crew. The validity of medical assessment certificates, aircraft rating certificates, skill test certificates has also been extended.
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See also:
India’s government debt could mount to 81% of GDP by 2024 even at the pre-COVID rate of growth, warns Moody’s

Cognizant CEO Brian Humphries warns of a tough 2020— plans to hire 20,000 freshers this year

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