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IndiGo starts layoffs, also extends leave without pay, and salary cuts

The company may further cut salary of pilots under training to around 75 percent, while the same for all line released pilots will be revised upwards to around 45 percent.

June 30, 2020 / 03:16 PM IST
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As a part of its latest steps to slash employee costs, domestic carrier IndiGo has begun laying off a section of employees, while also extending compulsory leave without pay (LWP) for others.

Sources told Moneycontrol that the company was presently not renewing contracts of some of its cabin crew staff members, adding that it will take a look at the same going forward.

Multiple sources added that some of the ground staff have also lost jobs. These employees were asked to undergo test and anyone getting lower than a threshold, has been asked to put in papers.

The company, which had already announced pay cuts for its employees, is looking to further cut salaries of pilots under training to around 75 percent. The trim for all line released pilots will be revised upwards to around 45 percent.

These changes will be instituted effective July 1.


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As per an initial email communication to employees to which Moneycontrol had access to, the company has announced that it will add "another 5.5 days of additional LWP to a total of 10 days LWP for a full-time leave program and this would be prorated for other leave programs based on available days".

"There will also be a salary revision for under training transition captains and transition first officers," said the mail from the airline's head of operations.

Replying to Moneycontrol's query, the airline said:

"IndiGo was one of the few airlines globally to give out full salaries in the months of March and April, despite business disruption. We employed the first pay cut in May, followed by leave without pay. Given the current capacity utilization, we have had to announce further leave without pay for pilots, which is a temporary measure. It will be reviewed basis the changes in our operational capacity."

The moves come a little over a month since airlines resumed operations on May 25. Though the carriers now can operate up to 45 percent of their capacity, from the initial one-third, industry executives say passenger loads are below 50 percent.

IndiGo CEO Ronojoy Dutta had mentioned that the airline is unlikely to make profits this year, and even by the end of the year, will be able to operate only 70 percent of its capacity.

The airline has the largest fleet in the domestic industry, and used to operate over 1,500 flights a day, before COVID-19 disrupted the industry.

Apart from IndiGo, other airlines including GoAir and SpiceJet, have also send a substantial percent of their employees on leave without pay.

Advisory firm CAPA India had estimated that up to 30 percent of the industry workforce may become redundant, because of the damage caused by the virus.

(This is a developing story. Check back later for updates)
Tanya Khandelwal
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: Jun 30, 2020 02:10 pm
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