Companies

IndiGo slashes pay up to 25 per cent for all employees

Ashwini Phadnis New Delhi | Updated on March 19, 2020

Ronojoy Dutta, CEO, IndiGo   -  Bloomberg

IndiGo would implement a pay cut ranging from 5 per cent to 25 per cent for many categories of its employees from April 1. The airline also hints at a temporary cut back in capacity due to the Coronavirus outbreak around the world and drop in travel demand.

This has been indicated in a letter that Ronojoy Dutta, Chief excutive Officer and President, IndiGo sent out to the airlines employees on Thursday.

“With a great deal of reluctance and a deep sense of regret we are, therefore, instituting pay cuts for all employees excluding Bands A & B, starting April 1. I am personally taking a 25% pay cut, SVPs (Senior Vice Presidents) & above are taking 20%, VPs (Vice Presidents) & cockpit crew are taking a 15% pay cut, AVPs, Bands D along with cabin crew will take 10% and Band Cs 5%,” the CEO says in his mail.

Sources indicated that those who will not be affected by the pay cut are the junior most employees like airport check-in-staff, loaders, among others.

In the letter, the airline CEO pointed out that the impact of the coronavirus on the aviation industry has been particularly severe, adding that governments across the globe have issued travel advisories, which have resulted in a virtual shutdown of all our international flights. “Domestic bookings too are down around 20% and it is not clear that the situation will not get worse before it gets better,” he says.

The letter adds with the precipitous drop in revenues the very survival of the airline industry is now at stake. “We have to pay careful attention to our cash flow so that we do not run out of cash. Unfortunately, this means that we have to reduce our costs in line with the drop in revenues,” the CEO says.

Pointing out that IndiGo wishes to emerge out of this crisis stronger, wiser and more resolute as an institution , the letters states that to that extent, “we are drawing up plans on how to respond to the travel needs of our customers, to interact with our suppliers in terms of our temporary cut back in capacity and to be extremely responsible in terms of safeguarding the health needs of our community.”

Published on March 19, 2020

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