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Coronavirus impact | IndiGo cuts salaries, CEO Ronojoy Dutta to take home 25% lesser pay

"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," the airline said in a letter.

March 19, 2020 / 05:55 PM IST

Due to the 'precipitous drop in revenues' domestic airline IndiGo has announced that it will cut employee salaries, including that of the CEO Ronojoy, by up to 25 percent starting April 1, 2020, the airline's CEO told employees in a mail.

Moneycontrol has seen a copy of the mail sent on March 19.

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

This, he added, means that there is a need to reduce costs in line with the drop in revenues.

"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."


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He noted that he is personally taking a 25 percent pay cut.

The company on March 18 also told pilots that they may no longer be required to do extra hours and that the airline is withdrawing the incentive of giving compensation in lieu of leave.

On the other hand, domestic carrier GoAir also said in a statement on March 18 that it has been forced to terminate the contracts of expat pilots, a move which it said is in line with the reduced international capacity.

Also Read | Exclusive: Coronavirus pandemic forces GoAir to lay off staff, terminates contracts of expat pilots

Here is the full text of the mail:

"These are very difficult times indeed. I cannot think of another crisis that has engulfed the entire world with its speed and penetration into the lives of every single human being on this planet. To that extent, all the distinctions of geography, income, race and religion have come crumbling down and we stand exposed and unified in this fight between one species and another. We need to approach this crisis responsibly and thoughtfully, as it attacks both our health and our economic well-being.

I am afraid that the impact of the corona virus on the aviation industry has been particularly severe. Governments across the globe have issued travel advisories which have resulted in a virtual shutdown of all our international flights. Domestic bookings too are down around 20% and it is not clear that the situation will not get worse before it gets better.

With the precipitous drop in revenues the very survival of the airline industry is now 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. 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 1st April 2020. I am personally taking a 25% pay cut, SVPs & above are taking 20%, VPs & cockpit crew are taking a 15% pay cut, AVPs, Bands D along with cabin crew will take 10% and Band Cs 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.

We wish to emerge out of this crisis stronger, wiser and more resolute as an institution than when we entered into this crisis in February. To that extent, we are drawing up plans on how to respond to the travel needs of our customers, to interact with our suppliers in terms of our temporary cut back in capacity and to be extremely responsible in terms of safeguarding the health needs of our community.

Our top priority is to focus on the health, safety and well-being of our customers and employees. We are asking our cabin crew to wear masks and gloves on all international flights and where appropriate, on domestic flights. We have simultaneously commenced a higher degree of intensive cleaning of all our aircraft as well as all our offices and facilities. We are also minimizing layovers of our crew in international destinations in line with permissible flight time duty rules.

Please look after yourselves, your families, your fellow workers and our customers. We are disciplined as an organization to think of safety as paramount to every action big and small that we take. It should be an easy transition for us to think of health as a natural extension of safety.Let us come out of this crisis, healthy, united, and proud of our selves."

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Moneycontrol News
first published: Mar 19, 2020 02:12 pm
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