Coronavirus impact: IndiGo announces salary cuts up to 25%
Governments across the globe have issued travel advisories which have resulted in a virtual shutdown of all our international flights
New Delhi: India's largest carrier IndiGo has grounded about 16 planes out of its total fleet of 260 aircraft and is asking the employees to take 10 to 25 per cent salary cuts as it grapples with the impact of coronavirus on domestic and international flights.
"Governments across the globe have issued travel advisories which have resulted in a virtual shutdown of all our international flights," said an airline official on thursday.
"Domestic bookings too are down around 20 per cent and it is not clear that the situation will not get worse before it gets better. With the precipitous drop in revenues, the very survival of airline industry is at stake," said the official.
"We know how hard it is for families to take a cut in take-home pay. But unfortunately, it is impossible for our company to fly through this economic storm without all of us making some sacrifice," the official added.
A week earlier, IndiGo said in regulatory filings that its quarterly earnings will take a hit as daily bookings decline by 15 to 20 per cent with coronavirus spreading across the world.
"In addition, the rupee has also depreciated sharply which will have an adverse impact on our dollar-denominated liabilities primarily on account of capitalised operating leases," it said.
The International Air Transport Association (IATA) has said the global air transport industry could see 113 billion dollars of revenue losses for the passenger business in 2020 as novel coronavirus snowballs into a public health emergency.
According to aviation consultancy firm CAPA, Indian carriers may initially ground around 150 aircraft, and the number is expected to grow as more domestic operations are curtailed over the coming weeks.
IndiGo currently has nearly 48 per cent share in the domestic aviation market and nearly 11 per cent in the international traffic to and from India.
Earlier on thursday, the Association of Asia Pacific Airlines (AAPA) said Asian airlines are facing revenue shortfalls of over 60 billion dollars this year as a result of sharp falls in demand which have already forced the grounding of over half the fleet.
By the same token, it said, many of the one million workers are unable to work because of drastic reductions in operations due to COVID-19 pandemic.