IndiGo announces pay cut; Air India likely to follow

IndiGo CEO Ronojoy Dutta says senior vice presidents and above are taking 20 per cent pay cut while vice presidents, cockpit crew are taking 15 per cent pay cut.

Mumbai: IndiGo CEO Ronojoy Dutta announced on Thursday that the airline was instituting pay cuts for senior employees and he would himself take the highest cut of 25 per cent amid the novel coronavirus pandemic that has hit the aviation industry hard.

"With the precipitous drop in revenues, the very survival of the airline industry is now at stake," Dutta said in his email to employees. "We have to pay careful attention to our cash flow so that we do not run out of cash."

"With a great deal of reluctance and a deep sense of regret, we are therefore instituting pay cuts for all employees, excluding Bands A and B, starting April 1, 2020," the chief executive officer said.

Band A and B are the lowest brackets in salary class, where most of the employees are.

"I am personally taking a 25 per cent pay cut, SVPs (senior vice presidents) and above are taking 20 per cent, VPs (vice presidents) and cockpit crew are taking a 15 per cent pay cut, AVPs (assistant vice presidents), Bands D along with cabin crew will take 10 per cent and Band Cs five per cent," Dutta noted.

The CEO said he knew how hard it was for families to take a cut in "take-home pay".

Air India may cut salaries by 5 per cent, amid coronavirus concerns

Government-owned Air India may cut salary of employees by 5 per cent amid its growing financial woes particularly in the wake of the coronavirus pandemic, which has nearly grounded its entire international operations, sources said.

The reduction will be across the board, they say.

The loss-making airline, which is in the process of a second attempt of privatization after failing to get a single buyer nearly two years ago, has already taken some steps such as reduced flying allowances to cabin crew besides withdrawing entertainment allowance to executive pilots, among others.

“Air India is considering a 5 per cent pay cut to its employees as it faces huge financial crisis due to the ongoing coronavirus outbreak, which has brought almost its entire international operations save the US, Canada and a few other markets, to the ground," a source told PTI.

According to another source, privy to the development, the carrier has also decided to take off from flying its over 100 reemployed pilots on contract as part of various cost cutting measures.

Air India spokesperson was not available for comments.

On Tuesday, the airline issued a circular stating that it is withdrawing entertainment allowance to executive pilots. It also said that all cabin crew including on contract rostered for flying duties from April 1 will have revised layover allowance of USD 100 for 30 hours and after that USD 4 for every additional hour.

In case of ultra long haul flights, it has been revised to USD 140 for 30 hours and after that USD 6 for every additional hour of flight.

The fuel allowance is also being cut by 10 per cent for six months, effective April 1, it said.

The airline said such measures are being taken “keeping in view the financial position of the company in the wake of the recent global development.''

This situation requires cost-cutting measures to the extent possible, the airline said adding “Airlines world over are taking steps in this regard, with a few having taken very aggressive actions and the measures taken by it are in line with these steps.”

(PTI Report)