Budget airline IndiGo has implemented a second round of pay cuts for employees, after having put in place pay cut of varying percentages across the board. In a letter to employees, IndiGo CEO Ronojoy Dutta said that deeper pay cuts will have to be taken as part of the airline’s effort to adjust cost structure in line with reduced revenues. He wrote to employees that the percentage of the pay cut will be increased only for employees at the ‘top of the pay pyramid’.
Ronojoy has will now take a pay cut of 35% and said that he is asking all Senior Vice presidents and above to take a 30% pay cut. All Vice Presidents will take a 25% pay cut and Associate Vice Presidents will take a 15% pay cut. All pilots will see their pay cut percentages increased to 28%, he added.
These increased pay cuts will come into effect from September 1. For all other employees, the pay cut implemented in May will continue.
In May, IndiGo had announced a pay cut ranging between 5-25%, in addition to its leave-without-pay programme for May, June and July, for senior employees.
In his email to employees, Ronojoy said that IndiGo intends to gradually reduce the number of days without pay, as the airline adds back more flights.
“We are not making any changes for August LWP (leave without pay) 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.
Even with domestic flights resuming in India, the volume of passengers travelling has significantly remained low.
In the January-March quarter, IndiGo posted a net loss of Rs 870.8 crore as air travel saw a significant drop due to the COVID-19 pandemic.
Apart from IndiGo, Vistara, SpiceJet and Air India too, have put pay cuts and leave without pay in place for employees and pilots.
Aviation advisory firm CAPA said on Monday that the viability of Indian aviation will be critical to support India’s economic recovery post-COVID and that India needs a clear strategy to deal with this crisis.