COVID-19 impact: Vistara to continue with pay cut for staff; to hike flying allowance for pilots

Mumbai: Full-service carrier Vistara will continue with pay cuts of its staff till March but will do away with the three-day leave without pay for pilots effective from January 1. For the pilots, the carrier will implement a 10 percent salary cut while at the same time increase their monthly base flying allowance to 40 hours from 20 hours at present, a Vistara spokesperson said in a statement to PTI on Thursday.

Vistara, the joint venture of Tata Group and Singapore Airlines, on June 30 announced a reduction in salary of its nearly 40 percent of the total workforce till December 31, to deal with the low cash flow amid a weak passenger demand in the wake of the pandemic.

For pilots, who were getting base flying allowance since April, which is a fixed component of the salary, for 70 hours per month, the allowance was reduced to 20 hours till December 31. In September, the airline also introduced a three-day 'Leave Without Pay' for the pilots.

"The pay cut scheme at Vistara will continue to be in effect until March 31, 2021, as part of which the Vistara CEO will continue to take the maximum cut of 25 percent in monthly pay," the spokesperson said.

The spokesperson added that the airline's senior staff, including members of the management, will be affected by a cut of 15 percent in monthly pay; while for those in mid-to-junior-mid levels, the cut will be 10 percent.

"COVID-19 continues to have an industry-wide impact on business, despite improvement in the operating environment. While we currently deploy nearly 70 percent of our pre-COVID-19 capacity, our operating revenue is still at a significant distance from normal levels," the Vistara spokesperson said in the statement.

To this end, the airline continues to take several measures to control operational expenditures, including containment of staff costs, the spokesperson added.

Employees at the junior levels, whose monthly cost-to-company equals or is more than Rs 50,000, will be affected by a 5 percent monthly pay cut, Vistara said.

"For pilots, a monthly 10 percent pay cut will be applicable. However, their monthly base flying allowance will be increased from the current 20 hours to 40 hours. The scheme does not impact nearly 60 percent of Vistara's staff at junior levels," the spokesperson added.

The aviation sector continues to grapple with low passenger volumes and travel restrictions by various countries. Even as the scheduled international commercial operations remain suspended since March 23, the domestic demand though has been on an uptick sequentially since the resumption of services from May, it has not yet matched the pre-COVID-19 level.

Domestic passenger volumes in November were almost half of the November 2019 level at 52.71 lakh passengers, according to data from the Directorate General of Civil Aviation. However, month-on-month, domestic demand grew 22 per cent over October 2020, as per the data.

"Our approach of going after measured growth in business puts the company in the position of being able to continue saving all jobs and implement rational reduction of staff costs, even though taking that decision has always been the toughest for the company's board and the leadership," Vistara said.

The airline said it is planning to ramp up its domestic operations in line with the government guidelines and remain operationally ready to operate more international flights whenever scheduled operations are allowed to resume.

Earlier this month, the civil aviation ministry allowed the airlines to increase capacity to 80 percent from 70 percent earlier. "Our long-term plans of the fleet and network expansion within and outside of India remain unaltered," said the spokesperson.