IndiGo – India’s largest carrier by domestic market share and fleet has announced that they would bid a painful adieu to 10 per cent of our workforce. The airline has a fleet of over 250 aircraft and cash reserves which dwarf every other airline in India. The airline would have nearly 25,000 employees on its payroll and this decision could impact around 2,500 employees.
While IndiGo paid full salaries for the month of March and April 2020, the airline undertook a number of measures such as Pay Cuts, Leave Without Pay and more. Indian aviation has been grounded for two months and the return has been painful. While the government allows 45% capacity to be restored, various restrictions by states and cities and lower demand has meant that air traffic is far from what it should have been, even with 45% capacity.
IndiGo in its statement has said that it is the first time in the history of the airline that such a painful measure is being implemented. The airline has planned multitude of steps to help the impacted employees and termed it 6E care package.
- Notice pay in lieu: Impacted employees will be paid notice pay in lieu of serving notice applicable to them. This will be calculated on the gross salary, basis the employee’s notice period.
- Severance Payment: In addition to notice pay, impacted employees will be paid a severance pay which will be calculated as one month of CTC for every completed year of service, subject to a maximum of 12 months. This will lead to higher cash in hand in comparison to calculations on Gross salary
- At a minimum, an impacted employee will receive at least 3-months’ gross salary, including both the above payments. Those with higher tenure with the company will receive more as per the above calculation method.
- Annual Bonus / Performance Linked Incentive (PLI) (for Non- crew), FY 2019 – 20: Payment of bonus / PLI shall be made when the Company decides to make this pay-out to the rest of the employees in this financial year, even after the impacted employee’s exit.
- Longevity Bonus(Crew): For year 2020, longevity bonus shall be paid along with Full and Final to eligible crew members. This bonus is only applicable for cabin crews.
- Leave Encashment, if any
- Gratuity, as applicable per Payment of Gratuity act
- Medical Insurance coverage for impacted employees will be extended until December 2020. There shall also be a provision to continue with the policy post December 2020 as per applicable market rates. For those employees who had covered their parents via the policy, such insurance will also be extended until December 2020. As is currently existing, payment will be borne by the employees.
Professional Support: We appreciate how important continuity of career is to our people and we will do our best to assist. Following are the details for Professional Support.
- 6E Career transition support: In addition to the financial package outlined above, we will also provide the impacted employees, an “Outplacement Allowance” to support them seek professional help to explore career opportunities, outside IndiGo.
- 6E Talent Directory: We value the skills and experience they bring to the table. The directory will help us reach out to them, before anybody else, when we see our operations revert to normal. Needless to say, that it is our commitment to first hire such employees back before opening such positions to other applicants.
- Recommendation letter: Each employee who has been impacted will receive a personalized recommendation letter to vouch for their professional credentials
One-way Air ticket
- Should the impacted employees need to travel back to their hometown or base location, we will assist them with a one way confirmed air ticket.
With this IndiGo joins multiple global peers in taking this decision of cutting the workforce. The current pandemic has affected every industry but the air, travel and hospitality industry has been impacted the most. It needs to be seen how other airlines in the country react to this news.