Air India says employees won't be laid off, but cuts allowance pay by 50%

The remarks have come days after private carrier IndiGo said it would lay off 10 percent of its workforce due to COVID-19-induced economic crisis

Press Trust of India July 24, 2020 00:04:02 IST
Air India says employees won't be laid off, but cuts allowance pay by 50%

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New Delhi: Unlike other airlines that have laid off a large number of workers, no employee of Air India will lose his job, the national carrier said on Thursday.

The largest airline of the country, IndiGo, announced on Monday that it would lay off 10 percent of its workforce due to the economic crisis caused by the coronavirus pandemic.

"Recent decisions of the Air India board regarding rationalization of staff cost were reviewed in a meeting at the Ministry of Civil Aviation this evening. The meeting reiterated that unlike other carriers which have laid off a large number of their employees, no employee of AirIndia will be laid off," the national carrier said on Twitter.

On Wednesday, Air India announced reduction in the allowances of its employees, who have a monthly gross salary of more than Rs 25,000, by up to 50 percent.

"There has been no reduction in the basic pay, DA (dearness allowance) and HRA (house rent allowance) of any category of employees. The rationalisation of allowances had to be implemented on account of the difficult financial condition of the airline that was exacerbated by COVID-19 ," the national carrier explained on Twitter.

The flying crew will be paid on the basis of the actual number of hours flown, it added.

"As domestic and international operations expand to reach pre- COVID-19 levels and the financial position of Air India improves, the rationalization of allowances will be reviewed," the airline said.

In another step to rationalise staff costs, Air India issued an internal order on 14 July, asking its departmental heads and regional directors to identify the employees, based on various factors such as efficiency, health and redundancy, who will be sent on a compulsory leave without pay (LWP) for up to five years.

Moreover, it said employees can voluntarily opt for the LWP scheme too.

The aviation sector has been significantly impacted due to the travel restrictions imposed in India and other countries in view of the pandemic.

All airlines in the country have gone for cost-cutting measures such as pay cuts, LWP and firing of employees in order to conserve cash.

The national carrier has a debt of around Rs 70,000 crore and the government started the process to sell it to a private entity in January. Air India's net loss in 2018-19 was around Rs 8,500 crore.

India resumed domestic passenger flights from 25 May after a gap of two months due to the pandemic. However, the airlines have been allowed to operate a maximum of 45 percent of their pre- COVID-19 domestic flights.

The occupancy rate in Indian domestic flights has been around 50-60 percent since 25 May.

The scheduled international passenger flights continue to remain suspended in the country since 23 March. However, Air India has been operating a significant number of special flights to and from countries around the world under the Vande Bharat Mission to help stranded people reach their destinations.

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