Go First has reduced salary by 16%, while IndiGo and SpiceJet have implemented leave without pay and pay-by-the-hour policies, respectively.
As a result of the dramatic drop in customers, airlines are reducing salaries and renegotiating vendor contracts.
To save costs, Go First has slashed employee salaries by roughly 16 percent, while IndiGo and SpiceJet have implemented a leave without pay (LWP) policy and a pay-by-the-hour structure, respectively.
Vistara, which in March reversed pay cutbacks for junior employees such as managers and cabin crew, is now focusing on vendor renegotiation and maximising cargo income rather than employee salaries. According to an Air India official, attempts are being made to pay salaries by the 7th or 8th of June.
Due to nationwide lockdowns and mandated RT-PCR testing, daily passenger traffic dropped from about 300,000 in February to less than 40,000 by the end of May. Airlines were forced to halt planes and cancel flights as a result of this.
Despite the fact that wages account for just about 10-15% of expenditure for no frill airlines, management is exploring various options to keep costs down.
“Airlines can’t recover costs with a load factor of approximately 40%. Yields have also been affected. For a trip to break even, load levels must rise to at least 65-70 percent,” a low-cost airline executive observed.
“This is our second wage cut in two years, and management has reduced our basic income this time. Flying allowances typically account for a higher share of pilot salary. However, due to a decrease in the number of flights, pilot work hours have substantially decreased. “I used to get to fly 40-45 hours a month, but now it’s down to less than ten hours,” a Go First pilot explains.
“The second wave has been difficult for all of us and has also resulted in a fall in passenger loads,” says IndiGo, which restored its leave without pay policy in June. As a result, we had to adjust our commercial schedule accordingly.
“Despite the current circumstance, one of our top priorities has been to safeguard all of Vistara’s 4,000+ workers. At the moment, the situation is quite fluid, making forecasting the future extremely challenging. However, we will continue to keep a careful eye on the market and take appropriate action as needed,” the airline stated.
