Thursday, December 03, 2020

IndiGo scraps leave without pay for staff, says 70% pre-Covid level reached

New Delhi: In an apparent sign of recovery of the aviation sector from the Covid-19 pandemic, India’s largest airline IndiGo has eliminated Leave Without Pay (LWP) for all employees which was introduced since April to control costs.

The airline took this decision on a day when the government has allowed airlines to utilise 80 per cent of their pre-Covid capacity as the number of passengers taking the flight continues to climb.

“At this point of time, it looks like we are on a path to a graduated and measured recovery. In anticipation of the improved revenue that I know we can deliver, we are removing the Leave without Pay across all departments from 1 January 2021,” CEO Ronojoy Dutta wrote to employees.

Domestic air traffic jumped the most since the lockdown, with a month-on-month growth of 33 per cent in November.

In June IndiGo had implemented a mandatory leave without pay program for 1.5 days to 5 days. Subsequently, in July, IndiGo announced 5.5 additional days of LWP for its pilots, taking the effective number of LWP to 10 days.

As cost cutting measure, the airline had also let go of 10 per cent of its employees and implemented a pay cut across the board.

Dutta said that he expects the government to remove curbs on capacity utlisation by early next year, however he says that the outlook for international traffic continues to remain challenging. “While we are not out of the woods, we are certainly moving in the right direction,” he wrote.

Company sources said that, as the airline is utilising more of its aircraft as it sees a growth in demand. In the second quarter, IndiGo had a capacity utilisation of over 30 per cent, and ended it at 47 per cent, much above its peers.

03/12/20 Arindam Majumder/Business Standard

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