Salary a thorny issue but we'll review & adjust: IndiGo CEO writes to staff

The airline this week suspended five pilots who were planning to strike protesting against delay in reversing salary cuts

IndiGo CEO Ronojoy Dutta assured employees on Friday that the company will review and adjust wages based on its profitability and the competitive environment.

Pilots however didn’t agree to Dutta’s arguments saying that while they were facing cuts, the top management has been rewarded with higher salaries including stock options.

The CEO of India’s largest airline by market share wrote to employees after multiple upset pilots expressed their displeasure about the delay to reinstate their pre-Covid salary. The airline this week suspended five pilots—in what is the first case of action against organized labour protest the airline witnessed in its inception after the pilots planned to organize a strike.

"It is a difficult and thorny issue but I think the underlying imperatives are to consider the wage structure in competitive industries, to take into account the profitability of the company, to empathize with employees trying to earn a living wage in an inflationary environment and above all to consider the contributions made by employees every single day to the success of this company," Dutta said.

Pilots in IndiGo have faced up to 30 percent cut in their salary including allowances. While the airline had recently announced an 8 per cent hike in the salary with effect from April 1, pilots are unhappy saying that despite the number of flights reaching pre COVID level, they will still face a 20 percent cut in their salary.

Dutta in his letter said that the airline was facing difficult times with record high jet fuel prices pointing out that pre-COVID in January, oil was at 65 $ per barrel. As of April 7 it was at 112 $ per barrel. The general perception is that we can simply pass through the cost of higher fuel by charging more from the consumer. The truth is as we raise fares, fewer people choose to travel. So beyond a certain level, higher ticket prices actually results in a decline of revenue, “Dutta wrote.

Simultaneously he pointed out that competition was intensifying with the launch of billionaire Rakesh Jhunjhunwala backed Akasa Air.

“Ultimately in the game of thrones that is developing in the airline industry, the key determinant of long term success will be continuous cash flow,” the CEO said.

Pilots that Business Standard spoke to however refused to agree with Dutta. Many of them are threatening not to adhere to the airline’s fuel saving policy as a mark of protest. “If there was such pain, why isn’t the top management forgoing more of their salary. While almost all departments have reverted back to their pre-Covid salary, only the flight crew are still facing cuts,” a pilot said.