Budget-carrier Vistara recently announced that it has asked its senior employees to take compulsory unpaid leaves for upto four days in the months of May and June.
In an attempt to sustain their businesses and prevent cash-burn the airline’s CEO Leslie Thng announced the decision to cut down employee-related costs.
“For the month of May and June 2020, we will continue with compulsory no pay leave (CNPL) for all staff, except for pilots and staff in Level 1A and 1B, as follows: Staff in Level 4 and 5 to go on 4 days CNPL per month; Staff in Level 2 and 3 to go on 3 days CNPL per month; Staff in Level 1C to go on 1 day CNPL per month,” Thng said.
The compulsory no pay leave will affect around 1,200 employees in senior grades.
The airline also announced that the monthly base flying allowance of pilots have been reduced to 20 hours during May and June, respectively, and their monthly reimbursement adjusted accordingly.
“With the latest lockdown extension until 17 May 2020, our operations continue to be suspended until the date, prolonging the period of no-revenues as well,” the airline said in a statement.
“This decision does not impact 70% of Vistara staff including cabin crew, other frontline staff and junior corporate office employees,” it added.
Airlines companies across the globe have been affected by the COVID-19 crisis. Almost the entire fleet of airlines have been grounded at various airports worldwide due to travel restrictions and nationwide lockdowns imposed by the governments to contain the virus and prevent community transmission.
Airline companies have now resorted to tough measures like sending employees on furloughs and cutting salaries in attempt to prevent cash burn. It is being predicted that if the lockdown gets extended any further, several budget carriers will have to file for bankruptcy.
Earlier in the month of April, Vistara had initiated salary cuts for its senior staff while implementing leave without pay for a section of its employees.
“As part of a number of steps we are taking to conserve cash and save costs, we had to make the difficult decision of further reducing our staff costs with the objective of preserving jobs,” said a Vistara spokesperson earlier while announcing the previous pay cuts.
Vistara rivals like SpiceJet, GoAir, AirAsia India, and Air India have also initiated measures like salary cuts and leave without pay for their staff to contain escalating costs.
Meanwhile, from other news sources, it is being reported that Vistara has negotiated a reduction and deferment of payments to some suppliers to save cash.
Vistara is a joint venture between Tata Sons and Singapore Airlines.
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