InterGlobe Aviation will shed 10% of its workforce as the airline struggles to control the impact of the pandemic.
InterGlobe Aviation (Indigo)'s CEO, Ronojoy Dutta, in a statement on Monday (20 July) said that the current pandemic has severely impacted the aviation industry. IndiGo is flying only a small percentage of its full fleet of 250 airplanes.To survive the situation, the company undertook a number of measures such as pay cuts, leave without pay and various other costs, but such measures were not enough to offset the decline in revenues. Therefore after carefully assessing and reviewing all possible scenarios, the company decided reduce 10% of its workforce, Dutta said in a statement.
Impacted employees will be paid 'notice pay in lieu of serving notice applicable to them', apart from a severance pay which will be calculated as one month of CTC (cost to company) for every completed year of service, subject to a maximum of 12 months, while their insurance coverage will be extended till December 2020, Dutta said.
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. Payment of bonus / PLI (pay-linked incentives) 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, the statement said.
Indigo reported a consolidated net loss of Rs 870.81 crore in Q4 March 2020 as against net profit of Rs 595.83 crore in Q4 March 2019. Net sales during the quarter rose 5.3% YoY (year-on-year) to Rs 8,299.06 crore.
Shares of InterGlobe Aviation rose 0.35% to Rs 974.75 on BSE. IndiGo is a low-cost carrier. With its fleet of 250 aircraft as of 30 June 2020, the airline offered 1,674 peak daily flights during the quarter and connected 62 domestic destinations and 24 international destinations.
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