COVID-19: Air India resorts to cost cutting, says insurmountable dip in revenues

New Delhi, Mar 21: Air India informed its employees on Friday that it is taking various cost-cutting measures, including decreasing allowances for all employees, except cabin crew, by 10 per cent for three months as there is an "insurmountable dip" in the revenues due to the coronavirus outbreak.

These measures have been announced days after GoAir announced layoff of expat pilots and IndiGo declared pay cut for its senior employees due to "precipitous" fall in revenues amid the pandemic.

"In the wake of recent global developments and the serious impact of COVID-19 pandemic...There is an insurmountable dip in the revenue which calls for stringent measures to reduced our costs," said an Air India office order to all its employees. PTI has accessed the order.

As per the order, the airline would undertake negotiations to review all agreements with lessors and hotels to reduce their rates.

"Special drive to be undertaken to recover all pending dues from government departments in a time-bound manner. An aggressive action is required by the concerned offices in the region as well at the headquarters," it added.

"It was agreed to implement 10 per cent deduction in allowances (excluding basic pay, house rent allowance and variable dearness allowance) in respect of all employees, except cabin crew, for a period of three months effective March 2020 salary," it noted.