Private airline Indigo on Thursday, March 19, announced a pay cut for all employees and also said that he too will take 25 per cent cut in salary amid the novel coronavirus outbreak.
"With the precipitous drop in revenues, the very survival of the airline industry now at stake," IndiGo CEO Ronojoy Dutta told news agency PTI while announcing the pay cut due to the ongoing turmoil in the aviation industry.
The IndiGo CEO stated that senior vice presidents and other top management are taking a 20 per cent pay cut while cockpit crew members are accepting a 15 per cent pay cut.
Airline industry turmoil deepens
Shares in US airlines fell sharply on Wednesday after Washington proposed a rescue package of $50 billion in loans, but no grants as the industry had requested, to help address the financial impact from the deepening coronavirus crisis.
The Trump administration's lending proposal would require airlines to maintain a certain amount of service and limit increases in executive compensation until the loans are repaid.
American Airlines Group Inc in a memo to staff rebuffed criticism that it had rewarded its shareholders with too many dividends and stock buybacks in better times, leaving it with less cash to manage the crisis.
In Australia, Qantas said it would cut all international flights after the Australian government warned against overseas travel and two-thirds of its 30,000 workers would need to take paid or unpaid leave.
Senior Qantas executives and the board will take a 100% pay cut until at least the end of the financial year ending June 30, up from 30% earlier, joining the chairman and CEO in taking no pay, the airline said.
In China, the epicentre of the outbreak, its biggest state-backed carriers reported a 80% plunge in passengers carried in February and said they would further optimise capacity and step up cost-cutting.
As countries step up border restrictions, more flights are being cut. Air Canada said it was gradually suspending the majority of its international and U.S. transborder flights by March 31.
India is poised to join a growing list of countries offering aid to its aviation industry. The Finance Ministry is considering a proposal worth up to $1.6 billion that includes temporary suspension of most taxes levied on the sector, according to two government sources who have direct knowledge of the matter.
(With Reuters inputs)
