Tuesday, July 21, 2020

IndiGo layoffs: Pilots escape the axe, for now

Two hours after receiving the note from CEO Ronojoy Dutta on July 20 on layoffs in IndiGo, the airline's pilots finally sighed with relief.  They had escaped the guillotine.
Soon after Dutta's mail, which went to all IndiGo employees, the management conducted Zoom calls with pilots, according to their home bases. The moot message was that pilots won't be impacted by the layoffs that would see 10 percent of the employees in the country's largest airline losing their jobs.
"Each meeting lasted about 30 minutes. It was conveyed that pilots will retain their jobs. Even trainee pilots are going to be safe," said a senior executive from the industry.
Dutta had said that the layoffs were required to offset the decline in revenues because of the COVID-19 disruption. "And from where things stand currently, it is impossible for our company to fly through this economic storm without making some sacrifices, in order to sustain our business operations," the CEO had said.
As of March 2019, IndiGo had 23,531 employees on the company’s rolls comprising of 3,187 pilots and 6,248 cabin crew.
Industry observers though reiterate that this won't be the last one hears about layoffs in IndiGo, or any other airline in the country. All the carriers, including SpiceJet, Vistara and GoAir, have already cut salaries and have sent a significant part of their workforce on leaves without-pay.
"This is just the start, and was inevitable. IndiGo may be the first to formally announce a layoff. Other airlines have already done so, though they package it as leave-without-pay," said a senior executive.
Interestingly, IndiGo is the only airline in the country that is sitting on a cash reserve. As on March 2020, the low cost carrier had a free cash of Rs 8,928.1 crore.
Another official from the industry warned that pilots may not be shielded for long. Data from industry regulator DGCA show that passenger traffic plummeted by over 80 percent in June, and things may not be much better in July. Airlines, including IndiGo, continue to operate only about a third of their capacity, even though government had raised the cap to 45 percent.
"Pilots will be impacted. Companies are taking one step at a time," says a senior industry official.
21/07/20 Prince Mathews Thomas/moneycontrol
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