LONDON – Indian low-cost carrier IndiGo (6E) has announced it will be cutting up to 10% of its workforce due to the economic strain caused by the ongoing COVID-19 pandemic.
In a statement by E6 CEO Ronojoy Dutta, there was what seemed to be a lot of regret in the decision, but it was something that was completely unavoidable in the current business environment.
“From where things stand currently, it is impossible for our company to fly through this economic storm without making some sacrifices in order to sustain our business operations.”
“Therefore, after carefully assessing and reviewing all possible scenarios, it is clear that we will need to bid a painful adieu to 10% of our workforce. It is for the first time in the history of IndiGo that we have undertaken such a painful measure,” he added.
A Hard Hit Nation
India has been subjected to a hard hit as a result of COVID-19, recording around 1.12m confirmed cases at the time of writing and 27,497 people sadly losing their lives.
Whilst domestic flight operations restarted on a limited basis on May 25, it evidently is not enough for airlines to work with.
Domestic capacity per flight is limited to 45%, meaning there is not enough room for the airlines to be making money to cover costs, never-mind a profit.
IndiGo 6E Care Package
As part of these job cuts, the airline has created what is dubbed a “6E Care Package” for employees who will be impacted by the decisions of IndiGo.
They will be given “notice pay” calculated on the individual’s gross salary, in lieu of serving notice applicable to them.
On top of that, a severance pay will be calculated as one month’s cost to the company for every completed year of service, subject to a maximum for 12 months.
This means an impacted employee will receive at least three months worth of gross salary.
A Thank you to All Affected Employees
The airline’s CEO added, “This has been one of the toughest decisions that we have had to take and we are ensuring that the transition process for the impacted employees is carried out seamlessly, professionally; and with the utmost respect and compassion.”
“We would like to express our heartfelt gratitude and sincere thanks to all our people who have stood by us through thick and thin; and we are confident that both individually as well as collectively, we will emerge stronger out of this crisis.”
One of Aviation’s Biggest Markets
This airline had previously announced a program of Leave without Pay (LWP), which is something that other carriers such as Air India have been implementing as a way of saving costs dramatically.
This has come with some tension on the Air India side, which could be why IndiGo is focusing more on job cuts as opposed to the LWP program.
Either way, it remains clear that as one of aviation’s biggest market, the strain in the region is now beginning to become more visible and that drastic actions are required.
It will be interesting to see how long the Indian industry will take to recover on this front and whether there would be any significant resurgence over the recovery period.