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Coronavirus Pandemic | GoAir announces 50% salary cut for top management

GoAir said, “The measures are temporary to combat COVID-19 impact.”

March 22, 2020 / 01:03 PM IST
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Just days after announcing suspension of its international operations, GoAir has joined IndiGo and Air India to cut salaries in order to tide over the Coronavirus pandemic.

Airline CEO Vinay Dube, in a message to its employees, said the top leadership  has voluntarily decided to take a 50 percent pay cut with immediate effect.

Dube, who mailed employees on March 21, said the measure is temporary.

 

Apart from reducing salaries and suspending international operations, the Wadia family-owned airline has also terminated contracts of its expat pilots, and put about one-third of its employees on leave without day.

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Among its peers, IndiGo employees have taken a pay cut of up to 25 percent, and Air India, which has already cut down on employee incentives, is now considering a 5 percent cut in salaries.

Almost all of them, including Vistara and SpiceJet, have also curtailed, or completely suspended, international operations.

The airlines have been forced to take these steps after a dramatic collapse in bookings as travellers cancelled tickets, and now refrain from traveling to limit exposure to the virus. But it is yet not clear if these measures will be enough.

Advisory form CAPA India has said that the domestic aviation industry could lose up to $600 million in the first quarter of the year itself. It added that about 150 aircraft could be grounded and up to 50 percent of the jobs in the aviation industry could go redundant.

The latest communication says that five have reportedly died in India, because of the virus, and more than 300 have been reported to be infected.

The impact has been similar, and in some countries more severe, in international aviation markets. There have been lay offs, senior management have taken pay cuts and a couple of airlines have already gone bust.

Aircraft have been grounded across the globe, with American major Delta Air Lines alone grounding about 600 planes. Others have started moving cargo in passenger aircraft.

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Airlines in India will be further forced to rationalise operations and reduce costs.

IndiGo, the country's largest airline, has trimmed its domestic operations by 25 percent to "match market demand over the next few week."

"Going forward, responding to the various travel restrictions imposed worldwide, most of our international flights are suspended and additionally, given the reduction in domestic demand, we are trimming our domestic India operations by approximately 25 percent for now. In this fluid situation, IndiGo will continually review operations to match capacity to demand," the airline had said.

It had made the announcement while also informing about reducing operations on March 22, when the country is observing Janata Curfew. GoAir has completely suspended its flights for the day.

In his email on cutting pay, GoAir CEO Dube also talked about the airline's plans after the Maharashtra government announced a lockdown till March 31.

"The Maharashtra Government has announced a complete lockdown of workplace for safety and security of the people and to contain the outbreak as a result of which we have also urged our employees (working out of different office across Maharashtra, except those directly involved in Operations) to work from home and support the business critical requirements and our operations team," the CEO stated.

ALSO READ: Coronavirus pandemic forces GoAir to lay off staff, terminates contracts of expat pilots

 

 

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