LONDON – Air India (AI) announced it is not like other carriers. None of its employees will lose their jobs due to the Coronavirus Pandemic.

The country’s largest airline, IndiGo (6E), announced on Monday that it would lay off 10% of its workforce. 6E blames both the economic crisis and the lack of demand for travel caused by the Coronavirus Pandemic.

Air India said on Twitter that its board will review recent decisions regarding the rationalization of staff costs. The board meeting will take place at the Ministry of Civil Aviation in the evening.

Still, even before tonight’s meeting, the board has reiterated that “no employee of Air India will be laid off.”

Allowance Reduction

On Wednesday, AI announced a reduction in the allowances of employees. The measure affects staff who have a monthly gross salary of more than RS25,000. Said reduction entails up to a 50% allowance cut.

The airline explained that there had been no reduction in the basic pay. AI will also not touch DA (dearness allowance) and HRA (house rent allowance) for any category of employee.

Air India also stated that it implemented the rationalization of allowances due to its difficult financial condition due to COVID-19. AI also said it would pay Flight Crew on the basis of the number of hours flown.

The carrier added, “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.”

Furthermore, to rationalize staff costs, the airline issued an internal order which identifies employees based on various factors.

Efficiency, health, and redundancy will inform AI when issuing compulsory leave without pay (LWP) for up to five years.

Moreover, the airline said employees can voluntarily opt into the LWP scheme.

Air India Boeing 777-300ER B77W. Photo: Andrew H. Cline

Combating Debt

A vast majority of global airlines have implemented drastic cost-cutting measures. The measures have included pay cuts, LWPs, and staff cuts in order to conserve cash.

Air India has a debt of approximately US$9.4bn (RS70,000). And the government started the process to sell the carrier to a private entity in January.

India allowed resumption domestic passenger flights from May 25. However, airlines can only operate a maximum of 45% of its pre-Coronavirus capacity.

Moreover, scheduled international flights remain suspended since March 23.

Yet, AI has been operating a number of flights to/from countries around the world. Under the Vande Bharat Mission, it has helped to repatriate many stranded travelers.