IT Correspondent
Mumbai, July 21:
After national career Air India refused to absorb 174 trainee cabin crew and withdraw resignations of 50 pilots, the Indian aviation industry has received another blow with “Indigo”, India’s largest airline by market-share, has decided to lay off 10 percent of its workforce to offset the decline in revenues post the COVID-19 pandemic.
Air India which had hired 174 trainee cabin crew on contractual basis, in November 2019 has refused to confirm their services and also has refused to reinstate 50 pilots who has resigned to join private airlines, but came back since they were not hired by their prospective employers due to pandemic. These decisions were taken in a meeting of AI and Civil Aviation Ministry officials held on 8 July,2020.
Indigo Airlines CEO Ronojoy Dutta on Monday said in a statement “It is clear that we will need to bid a painful adieu to 10 per cent of our workforce and it is for the first time in the history of “IndiGo” that we have undertaken such a painful measure. This is indeed a very unfortunate turn of events from the optimistic growth trajectory we had carved out for ourselves just six months ago. But this pandemic has forced us to re-evaluate our best laid plans”
“ although the airline had cut pays across its personnel, these steps were not enough to offset the decline in revenues. It is impossible for our company to fly through this economic storm without making some sacrifices, in order to sustain our business operations,” Dutta said.
“IndiGo is flying only a small percentage of its full fleet of 250 airplanes. The fixed costs are as high as 40 per cent for airlines and that “IndiGo” was spending Rs 40 crore a day during the lockdown. That number has come down. We are trying to whittle that down further by flying more, Dutta said.
“IndiGO” has over 23,000 employees.For those impacted by the layoff, the airline has announced a financial package, under which impacted employees will be paid notice pay in lieu of serving notice applicable to them. This will be calculated on the gross salary. In addition to notice pay, impacted employees will be paid a severance pay which will be calculated as one month of Cost to Company (CTC) for every completed year of service, subject to a maximum of 12 months. At a minimum, an impacted employee will receive at least 3-months’ gross salary, including both the above payments,” the airline said.
The impacted employees will also be paid bonus and the performance lined incentive, when the company decides to make this pay-out to the rest of the employees during the financial year. While crew members will also get a longevity bonus, all the laid off staff will be able to en cash their leave and will be given gratuity, the airline said. Apart from these measures, the airline said it will help the impacted employees through an ‘outplacement allowance,’ which will help them to pursue career options. These employees will also get a one-way ticket back home.
Domestic flights were suspended in March, coinciding with the national lockdown to limit the spread of coronavirus. The government later resumed domestic flights on 25 May, asking carriers to limit their operations to one-third of this schedule. Though this limit was raised to 45 percent, airlines continue to operate at about 30 percent. Data from DGCA showed that traffic plummeted by 83.5 per cent in June, year-on-year Apart from “IndiGo”, all its peers, including “Vistara”.”SpiceJet” and “GoAir” have been forced to take similar steps to reduce costs.
