IndiGo announces pay cuts as air travel plummets

India’s largest airline IndiGo has announced a pay cut for a cross section of its employees, effective April 1, after its business took a massive hit following travel bans and restrictions due to the Covid-19 (novel coronavirus) pandemic.

“I am personally taking a 25% pay cut,” IndiGo’s CEO Ronojoy Dutta informed employees Thursday. “With the precipitous drop in revenues the very survival of the airline industry is at stake,” he said. The airline has undertaken the move to keep its “costs in line” with the fall in passenger ticket revenues.

Barring employees in bands A and B (it isn’t clear who these employees are), all other employees will get a pay cut ranging from 20% to 5%. Dutta said that senior vice presidents and above would get a 20% pay cut; vice presidents and cockpit crew (pilots) 15%; band D employees along with cabin crew 10%; and band C employees 5%.

“We know how hard it is for families to take a cut in take home pay. But unfortunately, it is impossible for our company to fly through this economic storm without all of us making some sacrifices,” said Dutta. IndiGo is also the country’s most profitable airline and has cash reserves of over ₹20,000 crore.

Global aviation consultancy firm CAPA has predicted that by May many airlines across the world could be staring at bankruptcy, as country-wide travel bans have grounded their operations.

On Wednesday, IndiGo’s smaller rival GoAir terminated the contracts of its expat pilots after having to suspend its international operations. The airline also put in place a leave without pay programme for its staff on a rotational basis.