Updated: July 23, 2020 8:48:53 pm
National carrier Air India Thursday ruled out laying off its employees but said the rationalisation of allowances had to be implemented in view of the debilitating impact of the Covid-19 pandemic on the aviation sector. The statement comes days after Air India said it would send some employees on leave without pay for up to five years.
“Recent decisions of the Air India Board regarding rationalization of staff cost were reviewed in a meeting this evening. The meeting reiterated that unlike other carriers which have laid off large number of their employees, no employee of AirIndia will be laid off,” the airline said in a series of tweets.
Recent decisions of AirIndia Board regarding rationalization of staff cost were reviewed in a meeting at @MoCA_goi this evening.The meeting reiterated that unlike other carriers which have laid off large number of their employees,no employee of AirIndia will be laid off. (1/3)
— Air India (@airindiain) July 23, 2020
The statement also comes two days after India’s largest airline IndiGo, which is also the country’s only cash-positive airline, announced laying off 10 per cent of its workforce because of the economic crisis. Budget carrier GoAir has also put most of its employees on compulsory leave without pay (LWP) since April.
On Wednesday, Air India had announced a reduction in the allowances of its employees, who have a monthly gross salary of more than Rs 25,000, by up to 50 per cent.
“There has been no reduction in the Basic pay, DA and HRA of any category of employees. The rationalisation of allowances had to be implemented on account of the difficult financial condition of the airline that were exacerbated by COVID-19,” the airline said.
Further, it has been decided that flying crew will be paid as per the actual number of hours flown. “As domestic and international operations expand to reach pre-COVID levels and the financial position of Air India improves, the rationalization of allowances will be reviewed,” it said.
According to an official order dated July 14, the airlines had started the process of identifying employees, based on various factors like efficiency, health and redundancy, who will be sent on compulsory LWP for up to five years. Last week, Civil Aviation Minister Hardeep Singh Puri justified the national carrier’s decision to send certain employees on LWP, saying cost-cutting is necessary as equity infusion of Rs 500-600 crore every year is not sustainable.
The two-month ban on scheduled domestic passenger flights in India from March 26 to May 24 had a severe impact on the financial condition of airlines. All airlines in India have taken cost-cutting measures such as pay cuts, LWP and firings of employees in order to conserve cash flow.
Besides, Air India has a debt of around Rs 70,000 crore and the government started the process to sell it to a private entity in January this year. The national carrier’s net loss in 2018-19 was around Rs 8,500 crore.
India resumed domestic passenger flights from May 25 after a gap of two months due to the coronavirus pandemic. However, the airlines have been allowed to operate only a maximum of 45 per cent of their pre-COVID domestic flights. Occupancy rate in Indian domestic flights has been around 50-60 per cent since May 25.
(With inputs from PTI)
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