The airline industry has long been in a soup due to the novel coronavirus outbreak. But things got even worse for the sector post the governments imposing nationwide lockdowns and travel-bans. It is being predicted that if the lockdown gets extended any further, several budget carriers will have to file for bankruptcy.
In an attempt to sustain their businesses and prevent cash-burn, airline companies have now resorted to tough measures like sending employees on furloughs and cutting salaries.
Joining the likes of its rival, Vistara airlines recently announced that it will be sending its employees on compulsory leave without pay for three days between April 15 and April 30 as a measure to preserve jobs and conserve cash flow.
Extending the nationwide lockdown till May 3 to combat the coronavirus disease, Prime Minister Modi urged companies to be sensitive towards people and not sack them during this difficult period.
“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.
For the period between 15- 30 April 2020, about 30% of Vistara’s workforce will take compulsory no-pay leave of one to three days, depending on employment grades (three days for senior-most employees). This decision does not impact the remainder 70% of Vistara staff,” said Vistara spokesperson.
The exercise will be carried out at three levels. The first grade will take 3 days’ leave without pay, the next grade level will take two days’ leave without pay and then the third grade will have to take a day off with no pay.
On March 27, the airline had also introduced compulsory leave without pay for up to three days between April 1 and April 14 for the same set of senior employees. The compulsory no pay leave will affect around 1,200 employees in senior grades.
Company CEO Leslie Thng in an email to employees said, “With the announcement by the government of India on extending the lockdown, we continue to suspend all our domestic and international operations till 3rd May 2020 and this further impacted significantly on our cash flow with no revenue being generated over an extended period of time.”
Meanwhile in other news, it is being reported that Vistara has negotiated a reduction and deferment of payments to some suppliers to conserve cash.
Vistara is a joint venture between Singapore Airlines and Tata Group.
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