Coronavirus hits! Bad news - Salary cut for all employees of this company announced
It's no more a secret that how coronavirus is hitting stock markets and companies. Now, in a latest development in the wake of coronavirus, low-cost airline IndiGo's CEO Ronojoy Dutta has announced pay cut for all employees. Dutta will himself take 25 per cent cut in salary. IndiGo CEO Ronojoy Dutta while announcing pay cut development said, "With precipitous drop in revenues, the very survival of airline industry now at stake." IndiGo CEO says senior vice presidents and above are taking 20 per cent pay cut while vice presidents and cockpit crew are taking 15 pc pay cut.
On March 17, it was reported that all Indian airlines will report significant losses in the first quarter of this year and may initially ground around 150 planes as the shock from the coronavirus pandemic will be "far deeper and much longer".
Aviation advisory firm CAPA India on Wednesday said consolidated losses are estimated to be in the range of USD 500-600 million for the quarter, excluding Air India.
In a report, it said that some airlines may choose to temporarily shut down their operations by design on the basis that demand is so low that such action would result in reduced losses than if they continue to operate.
As per the report, even before COVID-19 (coronavirus) appeared on the scene, most Indian carriers already had very strained balance sheets and almost no liquidity.
"This latest shock will once again expose the vulnerability of India's aviation system as happened during the fuel price spike in 2008. But on that occasion the shock was short-lived, even if its impact reverberated for several years. This time, the shock itself will be far deeper and much longer," it said.
In the wake of significant reduction in services, the report said Indian carriers might initially ground around 150 aircraft, and the number is expected to increase as more domestic operations are curtailed over the coming weeks.
At present, the combined fleet of six major domestic carriers stands at around 650 planes.
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