Salary Cut and Leave Without Pay: IndiGo, AirAsia, Vistara Begin to Cut Corners


The aviation sector is one of the worst hit due to the suspension of all commercial passenger flights during the coronavirus-induced lockdown in the country which began on March 25. Bookings for flights have been cancelled till further orders.

IndiGo will cut salaries of senior employees from May onwards and also implement a ‘limited, graded leave without pay program’ for them during the months of May, June and July, its CEO Ronojoy Dutta said on Friday.

‘While we had paid employee salaries in full for the months of March and April, I am afraid that we are left with no option but to implement the originally announced pay-cuts from the month of May 2020,’ Dutta told employees in an email.

IndiGo had announced pay cuts for its senior employees on March 19. However, it rolled back the decision on April 23 in deference to the ‘government’s wishes’.

On March 23, the Modi government had asked public and private sector companies not to cut salaries or lay off employees during the COVID-19 lockdown.

In his email on Friday, Dutta said, ‘In addition (to pay cuts), given the gradual build-up of capacity, I am afraid we have to take the additional painful step of implementing a limited, graded leave without pay program for the months of May, June and July.’

‘This leave without pay will range from 1.5 days to 5 days depending on the employee group. While doing so, we will make sure that Level A employees, who form a majority of our workforce, will not be impacted,’ he said.

Dutta said, ‘As you all know, our operations have been pretty much grounded ever since March 25, 2020, except for a few rescue and cargo flights, resulting in practically no revenues since then.’

‘In addition, as and when we resume operations, it is likely that the airline will start with a much lower capacity initially and gradually build up capacity in succeeding months,’ he noted.
On March 19, Dutta had announced that the airline was instituting pay cuts for senior employees amid the COVID-19 pandemic that has hit the aviation industry hard. He had said he would take the highest cut of 25 per cent.

‘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,’ he had said.

All Indian airlines have implemented cost-cutting measures like pay cuts during the last few weeks due to the drastic decline in revenue.

GoAir has sent the majority of its employees on leave without pay till May-end.

Vistara has instituted a compulsory leave without pay for up to six days in April for its senior employees. In May and June, the same set of senior employees will go on leave without pay for up to four days each month.

AirAsia India has cut salaries of its senior employees by up to 20 per cent, while Air India has cut salaries for its staff by 10 per cent.

SpiceJet has cut salaries of mid and senior-level employees by 10-30 per cent.

As the majority of aircraft with Indian airlines are on the lease, they are currently seeking deferral of lease rentals by six months.

While no commercial passenger flights can fly during the lockdown period, cargo flights, medical evacuation flights and special flights permitted by the Directorate General of Civil Aviation (DGCA) are allowed to operate.