The no-frill airline Indigo today announced a salary cut by up to 25% for several employee categories from April 1. This comes as the air carrier faces severe blow on travel demand amid coronavirus outbreak. Also, the airline has hinted at temporary cut down on capacity.
The letter by Ronojoy Dutta, Chief excutive Officer and President, IndiGo addressed to the company's employees on Thursday said, "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%".
Nonethelesss, the move will not affect junior level employees in the company including airport check-in-staff, loaders etc.
Also, the letter points out that with the sharp decline in revenues, the survival of the airline industry now comes 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.
Furthermore, the letter by the CEO highlights the impact due to the coronavirus on the aviation sector which has bore the most brunt as governments worldwide have come up with travel advisories and lockdown spreads. All international flights have been virtually suspended and domestic travel too is down by almost 20%.