Airlines have asked for government help to help pay workers’ wages because the epidemic of coronavirus disease (Covid-19) forced authorities to stop air travel until March 31.
According to sources aware of this development, airline CEOs have asked the government to support 50% of the employees’ three-month wages.
The request came from government officials stating that companies should not fire employees even if their functions are stopped due to the pandemic.
“In the context of these difficult situations, all employees of public or private establishments are advised to extend their coordination by not terminating their employees – in particular casual or contract workers for their jobs or to reduce their wages “, a notice issued by the Ministry of Labor and Employment said.
Airline executives said it was difficult to pay employees, because they already operate on a very thin margin and depend primarily on cash flow, which comes from forward ticket sales.
Airlines say that even after resuming air travel on April 15, and even after that, they say consumer demand will be very weak, forcing them to land many planes. “The pain period has just started. It is not that as soon as the ban is lifted, we will see complete flights. It will take at least six months for customer confidence to return. There is an urgent need for government intervention, “said the executive.
According to a government calculation, Indian airlines are expected to operate only 30% of their fleet in the next two months.
“Air transport has been closed under the direction of the government. Our cash flow is zero but the fixed costs remain the same. Unlike other companies, if the planes do not fly, we will still have to pay the rentals and salaries. The government should shoulder some of the burden if it wants the business to survive, “said a private airline executive.
With the exception of IndiGo, other Indian airlines do not have the cash balance necessary to weather a protracted crisis. IndiGo CEO Rono Dutta assured employees on Tuesday that despite the airline’s closure, it will pay wages. “Be aware that during this temporary suspension, we will be spending our cash reserves to continue paying wages and benefits,” wrote Dutta.
Government officials confirmed that such a request had been made, but said that it was difficult to take care of all employees. Instead, a package could be developed to pay the salaries of lower-level employees.
A large part of airline employees – such as security guards, loaders, drivers, ground handling agents – work on contract and fear losing their jobs quickly.
Employees of several airlines, speaking to Business Standard, have expressed concern. “Companies cannot lay off permanent employees on the payroll as the Prime Minister himself directed them against, but for contract workers like us the future is uncertain,” said Manoj Saikia, who works. as a check-in agent for a private airline at Agartala Airport.
GoAir has already started to terminate expatriate pilot contracts since the first week of March. SpiceJet, based in Delhi, has decided to reduce the notice period by about 20 pilots, who recently filed their papers.