Aviation sector in distress; IndiGo CEO, staff to take pay cut

Airline stocks including SpiceJet and InterGlobe Aviation took a hit due to ongoing travel restrictions in the wake of coronavirus outbreak. Shares of SpiceJet crashed 55 per cent to Rs 37.85 during the past one month till March 18. Likewise, InterGlobe Aviation slipped 35 per cent during the same period.

The distress in the sector can be measured from the fact that InterGlobe Aviation said senior vice presidents and above took a 20 per cent pay cut, while vice presidents and cockpit crew took 15 per cent cut in their salaries. CEO Ronojoy Dutta will himself take a pay cut of 25 per cent.


There are also reports that domestic airlines will report significant losses in the first quarter of this year and may initially ground around 150 planes as the shock from the coronavirus pandemic will be “far deeper and much longer”, according to a report.

Aviation advisory firm CAPA India on Wednesday said consolidated losses are estimated to be in the range of $500-600 million for the quarter, excluding Air India.

In a report, it said that some airlines may choose to temporarily shut down their operations by design on the basis that demand is so low that such action would result in reduced losses than if they continue to operate.