India’s SpiceJet has deferred up to 50 percent of the April salaries of its employees as a cash crunch and a second wave of COVID-19 pandemic impact its operations, according to media reports from India. Junior employers like loaders and drivers received their full salaries but ground staff, cabin crew, commercial staff and pilots have been paid only 10-50 percent of their April salaries. The airline’s chairman, Ajay Singh, has foregone his entire salary.
“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 for operations, Gurcharan Arora, wrote to pilots on Saturday, according to India’s Business Standard. “The salary deferment (of between 10 percent to 50per 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 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,” an airline spokesman said. “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…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, according to the Business Standard.