IndiGo bucks trend, pays performance-linked bonus to lowest-rung staff

Airline had resorted to pay cuts and had laid off 10% staff when the going was tough; The incentives, withheld earlier, are being given to those with basic pay of up to Rs 50,000

India’s largest airline IndiGo has decided to pay performance-linked incentives to its lower rung employees for FY20.

The incentives, which were withheld in this financial year as part of cost-control measures, is being paid to Grade A and Grade B employees whose basic salary is up to Rs 50,000, a spokesperson of the airline said. The airline, which has 60 per cent market share in the country, had implemented two rounds of salary cuts and terminated 10 per cent of their workforce in order to control cash outgo that had risen because of two months of closure of air transport.

At the end of June 30, IndiGo had a total cash balance of Rs 18,449.8 crore, comprising Rs 7,527.6 crore of free cash and Rs 10,922.2 crore of restricted cash. “We had planned to give performance-linked bonus if situation improved. Now, passenger flow has increased, the bonuses were paid before Diwali,” an IndiGo executive said.

IndiGo’s decision to restore bonuses comes at a time when salary in the aviation industry has seen a contraction and thousands of employees have been furloughed. The highest bonus paid was Rs 55,000, sources said. 

Chief Executive Officer Ronojoy Dutta took a pay cut of 35 per cent while all other executive — senior vice-president and above — took a salary cut of 30 per cent. Pilots, too, faced salary cut of up to 35 per cent while vice-presidents and associate vice-presidents had a 15 per cent cut.

Traffic numbers in September have hit 34 per cent of what they were in September 2019. Monthly numbers are also rising. The average number of flyers per day in September was almost 45 per cent higher than August.