IndiGo, which carries one in every two domestic air passengers, has deepened pay cuts for its senior employees and pilots by another 10-13%. This comes a week after the airline announced that it will lay off a tenth of its staff to survive the upheavals caused by the coronavirus pandemic.
These additional salary cuts are mostly targeted at the company’s top management like chief executive Ronojoy Dutta, who will take a pay cut of 35%, while others such as senior vice-presidents will take a 30% cut, vice-presidents a 25% cut and associate vice presidents a 15% cut, a company official said adding that salaries of pilots will be reduced by up to 13%.
In May, IndiGo, like most peers, had initiated 20-25% pay cuts for senior staff, including pilots, in addition to a graded leave-without-pay programme for all its employees until July to save on costs following the covid-19 pandemic.
The airline’s chief executive had then taken a pay cut of 25%, while senior vice presidents had taken a 20% cut, vice presidents saw their salaries reduce 15% and those of associate vice presidents 10%.
However, the airline has found it impossible to overcome the economic crisis without taking tough decisions, and resorted to laying off about 2,700 staff.
The pandemic, which has claimed millions of lives across the world, has hit the aviation sector hard as demand for travel remains muted even as the country inches towards normalcy after prolonged periods of lockdown.
The domestic aviation industry is expected to have incurred losses of $3.0 billion-$3.6 billion in the June quarter, with airlines hit the hardest following a raft of restrictions and diminishing travel appetite because of the pandemic, aviation consultancy Capa had said.
IndiGo has hired Citigroup Global Markets and Bank of America (BofA) to advise on its proposed qualified institutional placement (QIP) through which it plans to raise at least ₹3,000 crore to tide through the trying times, Mint reported last week.
QIP is a capital-raising tool through which listed companies can sell shares, fully and partly convertible debentures, or any securities, other than warrants that are convertible into equity shares, to qualified institutional buyers.