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IndiGo to call all employees back to work, removes leave without pay from January 1

In a letter to employees on December 3, CEO Ronojoy Dutta announced the decision, and said he expects revenue to pick up.

December 03, 2020 / 11:13 PM IST
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Employees at the country's largest airline IndiGo will begin the New Year on a positive note, with CEO Ronojoy Dutta announcing plans to do away with leave without pay across the board.

In a letter to employees on December 3,  Dutta said the airline expects revenue to continue to pick up, and thus  "we are removing Leave Without Pay across all departments from January 1, 2021."

IndiGo had already reduced the leave without pay for employees, from 10 days a month to three days a month, in November.

The step was one of the many that the airline had taken to cut costs, amid falling revenue dented by the COVID-19 pandemic. The company had also let go of 10 percent of its employees.

But since domestic flights resumed in May, passenger traffic has gradually, but surely, increased month-on-month. Domestic air traffic jumped by 33.67 percent month-on-month in October.

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Though IndiGo's losses had widened in the second quarter, to Rs 1,194.8 crore, higher than the loss of Rs 1,062 crore posted in the corresponding quarter of the previous financial year, the numbers were better than what analysts expected.

Later during a conference call, Dutta remarked that he expects passenger traffic to reach pre-COVID-19 levels by early next year. He hinted the same in his mail to employees on December 3.

"At this point of time it looks like we are on a path to a graduated and measured recovery, and we are hopeful that the government will allow us to fly 100 percent of our domestic capacity by early next year," he said.

Coincidentally, the same day, the government said it was raising the cap to 80 percent, from 70 percent. 

What else did Dutta say?

The chief executive remarked, "While we are not yet out of the woods, we are certainly moving in the right direction."

Dutta added that the last six months were "genuinely unsettling, as we lost a large sum of money...which means that we need to once again rise to the occasion to stabilise this ship quickly.

"For us to be profitable, our revenue generation needs to increase sharply and substantially...in anticipation of the improved revenue that I know we can deliver, we are removing Leave Without Pay across all departments from January 1, 2021."
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Dec 3, 2020 11:13 pm

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