IndiGo's cost cutting continues, employees to go on additional leave without pay days

BCCL
  • The company in an email sent to the staff said it would add another 5.5 days of additional LWP to a total of 10 days for all employees.
  • These changes will be effective from July 1.
  • “It will be reviewed on the basis of changes in our operational capacity,” the company told Business Insider.
India’s largest low-cost-carrier IndiGo has announced a further extension of Leave Without Pay (LWP) for its employees.

The company in an email sent to the staff said it would add another 5.5 days of additional LWP to a total of 10 days for all employees, which will be effective from July 1.

“Given the current capacity utilization, we have had to announce further leave without pay for pilots, which is a temporary measure. It will be reviewed on the basis of changes in our operational capacity,” the company told Business Insider.

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The company’s email also said that there will be a salary revision for under training transition captains and transition first officers

“At a time when airlines are operating at a limited capacity, reducing pilots salaries is one of the ways to bring down costs. All airlines are looking at different ways to bring down all their cost components,” an airline official told LiveMint.

According to other media reports, the company has also laid off several employees and declined to renew any contracts. Sources told Moneycontrol that some of the ground staff have also lost jobs and it was presently not renewing contracts of some of its cabin crew staff members, adding that it will take a look at the same going forward.

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However, the company did not confirm any of the claims in its official statement.

Due to the government mandate currently, airlines are only allowed to operate domestic routes with up to 45% of their total capacity, and the international flights are suspended till Jul 15. International flights bring in a larger chunk of revenue for airlines like IndiGo. And, previously highlighting the same fact, IndiGo CEO Ronojoy Dutta told Minit that he is expecting the government to resume international operations soon in a phased manner.

According to an aviation consultancy CAPA India report, the Indian aviation sector is projected to incur a staggering $3.3-$3.6 billion loss in the first quarter due to the restrictions and diminishing travel appetite of air passengers.

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SEE ALSO: All international flights to remain suspended till July 15 but govt might allow certain flights on select routes
Indian aviation sector may incur $3.3-3.6 bn loss in Jun quarter: CAPA India
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