Vistara announces 5-20% pay cuts for 40% of its employees till December

IndiGo too, has reportedly announced pay cuts and will be implementing another 5.5 days of leave without pay.
Vistara Airlines
Vistara Airlines
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Vistara on Tuesday announced a pay cut between five to 20% till December this year for around 40 per cent of its employees as cash flow continues to be adversely affected due to the coronavirus pandemic.

The full-service carrier has more than 4,000 employees on its payroll.

"About 60 per cent of our employees are not impacted by the pay cut," a Vistara spokesperson said.

Vistara CEO Leslie Thng told employees in an email: "From 1st July, 2020, to 31st December, 2020, I will take a 20 per cent pay cut and we will be implementing a monthly pay cut scheme for staff (except for pilots as follows): 1) 15 per cent pay cut for staff in Level 5 and 4, 2) 10 per cent pay cut for staff in Level 3 and 2, and licensed engineers in Level 1C, 3) 5 per cent pay cut for staff in Level 1 with monthly CTC equal or more than Rs 50,000."

"For pilots, we will continue with the reduction of monthly base flying allowance to 20 hours for July to December 2020. Allowances will also be adjusted for pilots under certain categories of training," he added.

Till April, Vistara's pilots were getting base flying allowance, which is a fixed component of the salary, for 70 hours per month.

Thng told employees the airline is operating at less than 30 per cent of its original network and the passenger loads on its flights are also not as strong as before the coronavirus-induced lockdown.

"Our financial performance will continue to be negatively affected by COVID-19 as travel confidence and demand will take a while to fully recover to pre COVID-19 level," he added.

On May 5, Thng had announced that senior employees will have to go on compulsory leave without pay (LWP) for up to four days per month in May and June. Vistara had sent the same set of senior employees on compulsory LWP for up to six days in April.

After a gap of two months, India resumed its domestic passenger flights on May 25. Scheduled international passenger flights continue to remain suspended in the country.

The aviation sector has been hit hard by the pandemic and all airlines in India have resorted to cost-cutting measures like pay cuts to survive the crisis.

On Tuesday, the Vistara spokesperson had said, "The ongoing pandemic continues to adversely impact our financial performance, as we are operating on a significantly reduced network since resumption of domestic flights amid low demand."

"Vistara is making every effort to save jobs of more than 4,000 of its people while conserving cash and pursuing to reduce operational expenditures, which includes staff costs," the spokesperson had said.

IndiGo too, has reportedly announced pay cuts and leave without pay for its pilots. The airline will implement another 5.5 days of leave without pay, taking the total leave without pay policy to 10 days, CNBC-TV18 reported.

"Effective 1st July, 2020, we will have to implement another 5.5 days of additional LWP to a total of 10 days LWP for a full time leave program and this would be prorated for other leave programs based on available days," the mail to pilots reportedly read.

The pay cuts, the business daily reported, are to the extent of 40%. While IndiGo confirmed to CNBC-TV18 that it extended leave without pay, the airline called it a temporary measure.

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