India's low-cost airline IndiGo on Thursday announced a pay cut for its employees, including the Chief Executive Officer (CEO) and Vice-Presidents, in the wake of the Coronavirus pandemic that has already taken a huge toll on the avaition sector worldwide.
Ronojoy Dutta, the IndiGo CEO, said he will himself take a pay cut of 25% on his salary, emphasising the survival of the airline sector is at stake.
"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 was quoted as saying by PTI.
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.
"Senior vice presidents and above will take a 20% pay cut; vice presidents, cockpit crew taking 15%," Roy said.
According to a report released on Wednesday, all Indian airlines will take a beating and are expected to report significant losses in the first quarter of this year and may initially ground around 150 planes as the shock from the coronavirus pandemic will be "far deeper and much longer".
Aviation advisory firm CAPA Indiasaid even before COVID-19 (coronavirus) appeared on the scene, most Indian carriers already had very strained balance sheets and almost no liquidity.
"This latest shock will once again expose the vulnerability of India's aviation system as happened during the fuel price spike in 2008. But on that occasion the shock was short-lived, even if its impact reverberated for several years. This time, the shock itself will be far deeper and much longer," it said in a report.
In the wake of significant reduction in services, the report said Indian carriers might initially ground around 150 aircraft, and the number is expected to increase as more domestic operations are curtailed over the coming weeks.
"If the decline in traffic continues to be severe, the majority of the fleet could be grounded by April," it noted.
As per CAPA India, all Indian airlines will report significant losses in the first quarter despite oil prices at around USD 30 per barrel.