IndiGo CEO Ronojoy Dutta announces salary cuts of up to 25%
IndiGo’s CEO Ronojoy Dutta on Thursday informed employees about a company-wide top down 5%-25% salary cut in a cost-cutting exercise in reaction to the coronavirus crisis which has dismantled airline operations in India and across the world.
In an email, Dutta said he was taking a 25% cut, while other executives above the senior vice president level would take 20% reductions. Vice presidents and pilots would have to bear a 15% cut, and others, including cabin crew, would be in for 5%-10% deductions.
“We know how hard it is for families to take a cut in take home pay. But unfortunately, it is impossible for our company to fly through this economic storm without all of is making some sacrifices,” Dutta told IndiGo employees.
IndiGo spent Rs 3,210 crore on salaries last financial year, about 11% of the airline’s total expenses. The annual report cited CFO Rohit Philip’s gross salary as Rs 10 crore. Dutta’s salary wasn’t cited.
Dutta’s mail came hours after IndiGo’s head of flight operations told pilots that the company would be taking some “tough calls” over the next few weeks. “The economic environment has deteriorated significantly and no airline is insulated from this severe downturn,” Ashim Mittra, senior vice president of flight operations, wrote to pilots.
“It has become a necessity to initiate some tough calls and we are working on a string of measures which shall be shared and implemented over the next few days and weeks,” he added in the short missive.
IndiGo, India’s biggest airline by number of passengers, has suspended close to 70% of its international operations and is cancelling domestic flights every day.
Yesterday, AirAsia India’s chief Sunil Bhaskaran told staff at its Bengaluru headquarters that the airline would be halting its fleet expansion plans as of now. This move come two days after low fare carrier GoAir offered a leave without pay to staff and set to terminating contracts of expat pilots.
AirAsia India – a venture between Malaysia’s AirAsia Berhad and diversified Indian conglomerate Tata Sons – currently has 33 planes and was planning to take it up to 40 by end May.
Bhaskaran gave the example of a peer airline which has grounded more than a third of its fleet and said AirAsia India was in a better position due to its smaller size and no international operations.
GoAir and Vistara have suspended all international operations while IndiGo and Air India have suspended 65%-70% of theirs. Bhaskaran didn’t allude to a pay cut. In January, AirAsia Berhad took a decision to cancel the annual productivity linked bonuses to all global staff in all affiliate airlines due its financial problems.
