IndiGo to lay off 10% of its workforce

Low cost carrier IndiGo said it is laying off 10 per cent of its workforce due to the adverse financial impact of the Covid-19 pandemic. Although sources said that pilots will not be affected, numbers indicate that almost 2,500 of their estimated 25,000 employee strength will lose their jobs.

The airline, which was believed to have cash reserves of Rs.20,000 crore, had earlier announced pay cuts and leave without pay to cut costs.

The airline announced a “6E Care Package” to help the impacted employees which included several measures to support them. The company said impacted employees will be paid a notice pay based on the gross salary as per their notice period, and a severance pay of their CTC (cost to company) for every completed year of service.

“At a minimum, an impacted employee will receive at least 3 months’ gross salary. Those with higher tenure will receive more as per the calculation,” the airline said.

IndiGo also announced that it would be paying performance linked incentives to non-crew employees for 2019-20 even after their exit. It also announced a longevity bonus for cabin crew which would be paid along with the full and final settlement.

The airline said that the medical insurance coverage for the impacted employees would be extended till December and there will be a provision to continue the policy even later.

An “outplacement allowance” has been announced to support impacted employees to explore career opportunities outside IndiGo. It is also launching a talent directory to ensure that if and when the airline hires again, the laid-off employees will be given first preference. An in-house emotional support programme will help those who need it. Employees are also being given one-way air tickets to travel back home.

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.

IndiGo, which has more than 250 aircraft in its fleet, had increased its domestic market share of 48 per cent in March to 52 per cent in June. The April to June quarter was a washout for all airlines as international commercial operations could not commence due to several curbs. The limited domestic operations also failed to increase income as expected, as the occupancy rate has been around 50-65 per cent.

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