Covid impact: SpiceJet defers up to 50% salary of most employees in April

SpiceJet had been facing financial issues even before the second wave of the coronavirus pandemic hit the country in March 2021

SpiceJet has deferred upto 50 per cent of the April salary of its employees as a cash crunch and a second wave of Covid-19 pandemic impact its operations.

While junior employees, including loaders and drivers, have received their salary in full,  others including ground staff, cabin crew, commercial staff and pilots have been paid only 10-50 per cent of the April salary. The airline's Chairman Ajay Singh has forgone his entire salary. Employees have been informed that the deferred salaries will be paid once the situation improves.

"The domestic passenger traffic across all airlines which had peaked at more than 300,000 passengers per day in mid-February 2021 (showing signs of recovery), has now drastically dropped to less than 130,000 passengers per day. In this backdrop, the company has once again been compelled to implement certain tough economic measures to secure the long term interest of our SpiceJet family," the airline's Vice President (Operations), Gurcharan Arora, wrote to pilots on Saturday.

"The salary deferment (of between 10 per cent to 50 per cent) in the higher pay grades is a temporary measure to survive this economic crisis and the deferred salaries will be paid by the company once the conditions improve," he added.

SpiceJet had been facing financial issues even before the second wave of the coronavirus pandemic hit the country in March. The airline has defaulted on aircraft lease payments and has been served grounding notices. Payments to many vendors too, have been delayed.

The airline management's decision to defer salaries has upset its staff.

"We were shocked when we received the salary slip last evening. We took a cut in  our salaries last year due to the pandemic. Employees have their equated monthly instalments and they will be badly impacted," said a ground staff. "There is no clarity when the balance salary payment will be made," said a ground staffer.

A pilot complained that captains with over three years of experience are now earning Rs 1.5 lakh-Rs 1.8 lakh per month following a cut in salary last year. Earlier the earnings were more than Rs 5 lakh. "Now there is a further reduction," he complained.

A SpiceJet spokesperson said there were no salary cuts this time and only graded salary deferrals.

“The deadly Covid-19 second wave has resulted in the country’s worst-ever crisis with the aviation sector again bearing the biggest brunt. Unfortunately, we have been forced to implement certain tough measures to secure the long term interest of the SpiceJet family. There will be no salary cut for any employee. However, under these extreme and unavoidable circumstances we are enduring, we are forced to implement a graded salary deferment for some of our employees. We are ensuring that most of our colleagues, including those in the lowest pay grades, are not affected at all by this deferment and will be paid salaries in full. The chairman and managing director have decided to forgo their entire salary. This is only a temporary measure and the deferred salary amount will be paid by the company in full once the condition improves," said the SpiceJet spokesperson.