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SpiceJet Deferring Employee Salaries by up to 50 Percent
India’s low-cost domestic carrier, SpiceJet, has made the decision to defer up to fifty percent of April’s salaries of its many employees as a lack of cash amidst India’s second wave of Covid-19 infections has tragically impacted its operations.
Junior employees such as the drivers and loaders have received their full salaries, but cabin crew, commercial staff, ground staff and pilots have only been paid about ten to fifty percent of their April salaries.
The chairman of the airline, Ajay Singh, has foregone his entire salary. Employees have been informed that the deferred salaries will be paid once the financial and pandemic situations improve.
“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,” vice president for operations for SpiceJet, Gurcharan Arora, wrote to pilots on Saturday, May 1.
SpiceJet had been facing financial issues even before the second wave of the pandemic hit the country in March, resulting in the airline having to default on aircraft lease payments and having been served grounding notices. Payments due to many vendors have also been delayed.
“The salary deferment (of between 10 percent to 50 percent) 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,” Arora added.
With the second wave raging across India and as hospitals are running out of bed availability and oxygen supply, the deferment of salaries could last for at least a number of months.
As expected, the airline management’s decision to defer salaries has caused great upset amongst its staff.
“We were shocked when we received the salary slip last evening. We took a cut in our salaries last year due to the pandemic. Employees have their equated monthly installments and they will be badly impacted,” said a ground staff. “There is no clarity when the balance salary payment will be made,” said a ground staffer.
Additionally, a SpiceJet pilot complained that captains with much more experience were currently only earning Rs 1.5 lakh to Rs 1.8 lakh ($2000 to $2400) per month following a slice in salary last year. Pre-Covid earnings saw the pilots earning more than Rs 5 lakh ($6800).
A SpiceJet spokesperson said there were no salary cuts this time and only graded salary deferrals.
“Unfortunately, we have been forced to implement certain tough measures to secure the long-term interest of the SpiceJet family. 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. We are ensuring that most of our colleagues, including those in the lowest pay grades, are not affected at all by this deferment and will be paid salaries in full.” said the SpiceJet spokesperson.
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