COVID-19 impact: SpiceJet to pay employees based on work hours

With the number of COVID-19 cases surging and revenue of airlines dipping, no-frills carrier SpiceJet has decided to restore its structure of paying its employees corresponding to their work hours.

New Delhi:As the country is grappling with the second wave of COVID-19, no-frills carrier SpiceJet has decided to restore its structure of paying its employees corresponding to their work hours.

"Recognising the sudden surge in the number of active COVID-19 cases across the country, decrease in passenger traffic and load factors, the government has also recently reduced the capacity cap from 80 percent to 50 percent of the capacity of the pre-COVID level. This sudden drop due to an unprecedented surge in COVID coupled with varied travel restrictions across India has adversely affected our revenue and cash flows," an e-mail from the airline HR to the employees read.

In view of a devastating second wave of the pandemic, the Ministry of Civil Aviation has raised the lower limit on airfares by 13 - 16 percent, making domestic air travel costlier.

"The company is reverting to the structure where employees will be paid according to the work hours contributed while maintaining basic thresholds. While the salaries for the month of May shall be credited to your bank accounts on 1 June, there will be a graded deferment of up to 35 percent for some of our employees," the letter read.

According to SpiceJet, the passenger traffic has fallen to less than 10 percent as compared to the pre-COVID levels.

According to a report by rating agency ICRA, airlines in India will incur net losses of about Rs 21,000 crore this financial year (FY), following the widespread disruptions caused by the pandemic and would require additional funding of up to Rs 37,000 crore through FY 23 to recover from their losses and debt.