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Following a massive decline in revenues of 88 per cent up to July because of the COVID impact, Air India Express has announced a rationalisation scheme for pay cuts for employees, with pilot allowances reduced by 40 per cent.
The scheme is similar to what has been implemented by its parent company, Air India.
In an office circular dated August 5, T. Vijayakrishnan, Chief of HR, said that the company, along with other aviation companies, has been adversely impacted by the Covid-19 pandemic.
"Consequently, the airline's revenues up to the month of July have declined as much as 88 per cent," the circular said.
In order to meet the payment commitments to banks, aircraft lessors and other key vendors, the airline has been forced to increase its working capital borrowings. It has been taking measures to cut costs and fixed charges on the meagre earnings through renegotiation of contracts with all key vendors.
"As you all may be aware, Air India, our parent company, has also implemented a rationalisation scheme to reduce the funds outflow in terms of compensation to employees," the circular said.
It has received directions from the Civil Aviation Ministry and parent company to implement a similar rationalisation exercise in Air India Express as its situation is no different at this point of time.
"It is therefore necessary for all of us in Air India Express to accept commensurate sacrifice in our monthly remunerations, until the adverse effect of Covid pandemic on our operations/revenues substantially wears off," Vijayakrishnan said.
The allowances of pilots has been reduced by 40 per cent. These include flying allowances, special pay and layover allowances.
For ground employees, there will be no reduction for emoluments up to Rs 25,000, 5 per cent reduction up to the grade of Senior Officers and reduction of 7.5 per cent of gross emoluments for employees above this level, going up to CEO.
The rationalisation scheme will be effective from April 1 and will continue till further review by the board of directors.
For Commanders who fall in special contracts of 15 days on and 15 days off, their gross remuneration will be reduced by 50 per cent.
For trainee captains, the remuneration will be reduced by 40 per cent. For first officers, co-pilots, trainee co-pilots, the flying allowance will be reduced by 40 per cent.
The monthly stipend of trainee co-pilots will be reduced by 10 per cent. For cabin crew, the domestic layover allowance will stand reduced by 10 per cent.