Homeaviation News

IndiGo cuts salaries of pilots, introduces lower pay packages and mandatory leave without pay

IndiGo cuts salaries of pilots, introduces lower pay packages and mandatory leave without pay

IndiGo cuts salaries of pilots, introduces lower pay packages and mandatory leave without pay
Profile image

By Anu Sharma  May 19, 2020 6:14 AM IST (Updated)

India's largest airline IndiGo has implemented a a number of measures to reduce the salary of its pilots amid the COVID-19 pandemic, sources told CNBC-TV18.

India's largest airline IndiGo has implemented a a number of measures to reduce the salary of its pilots amid the COVID-19 pandemic, sources told CNBC-TV18.

Recommended Articles

View All

The airline, which commands 49 percent share in domestic aviation market, has asked some of its pilots to opt for either an annual pay package with 42 days PL (paid leave) program or to opt for a pay package which will have 3 weeks of work and then one week rest. This step is likely to severely impact the salary for pilots as a substantial amount is expected to be deducted.
IndiGo is yet to respond to CNBC-TV18's query.
In addition to the above two options, there was also an option of 22 days PL program, which used to result in higher salary for pilots as compared to 42 days PL and three weeks work with one work rest program.
Also read:
The airline has blamed the COVID-19 pandemic for the reshuffle in pay structure.
"As you are aware, the COVID-19 pandemic has significantly impacted our operations. Also, as and when we resume operations, it is likely that we will initially commence operations at a lower scale and then gradually scale up capacity, based on demand and other relevant considerations. You will agree that as a result of this, there is no requirement for the extra availability that is offered by the 22 days PL program," the airline's leave planning department wrote to pilots in a mail reviewed by CNBC-TV18.
"Therefore, keeping in mind the current operational requirements and in the interest of utilising our resources in the most optimum manner, we would like to offer you the option of choosing from (a) the 42 days PL program or (b) the one week off leave program," the airline added.
The airline has not mentioned the time period for which the above decision will be applicable. Traditionally, IndiGo asks the pilots to make the decision about the pay structure once a year, sources said.
Simultaneously, the airline has also implemented the pay cuts which were announced in March but reversed in April. Hence, it has also cut salaries of pilots by 15 percent for a period of three months with effect from May.
In addition, the airline has also implemented a mandatory leave without pay program for 1.5 days to 5 days. However, most pilots are facing a mandatory leave without pay for 5 days. This measure is also expected to be valid for a period of three months as of now.
The airline had recently cut the salaries of the pilots who were "not yet released" or who are undergoing training by 50 percent.
It is important to note that IndiGo is considered to be the airline with the best balance sheet in India. As of December 2019, IndiGo had a total cash reserve of Rs 20,068.7 crore including Rs 10,655.9 crore of restricted cash.
"IndiGo is well-placed in terms of cash reserves ($1.13 billion of free cash and $1.33 billion of restricted cash) compared with other Indian carriers. However, it too is not immune to risks in the event of a prolonged crisis," CAPA India had said in its report on May 1.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!

Most Read

Market Movers

View All
Top GainersTop Losers
CurrencyCommodities
CompanyPriceChng%Chng