India’s SpiceJet defers up to 50% of April wages

SpiceJet (SG, Delhi Int’l) has deferred payment of between 10% and 50% of its employees’ salaries for April, blaming it on cash-flow problems due to a second wave of the coronavirus that is now raging across India, the airline told staff on May 1. While junior employees such as loaders and drivers have received their wages in full, ground staff, cabin crew, commercial employees, and pilots have had part of their salaries withheld. The carrier’s chairman and managing director, Ajay Singh, has forgone his entire salary, the company claimed. Deferred salaries will be paid in full once the situation improves, workers were told. “Domestic passenger traffic across all airlines, which 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. With 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,” Gurcharan Arora, vice president for operations, said in a letter to pilots. “The salary deferment, of 10% to 50% in the higher pay grades, is a temporary measure to help us survive this economic crisis and the deferred salaries will be paid by the company once conditions improve,” he added. SpiceJet had already been experiencing financial issues when the second wave hit the country in March, defaulting on aircraft lease and other payments. India reported a record 401,993 new coronavirus cases on May 1. But employees registered their shock on learning about the postponed pay, with one groundhandler telling Business Standard: “We took a cut in our salaries last year due to the pandemic. Employees have their own bills to pay and they will be badly impacted. There is no clarity as to when the balance will be paid.” SpiceJet said in a statement that “the second wave has resulted in the country’s worst-ever crisis, with the aviation sector again bearing the biggest brunt. […] There will be no salary cuts for any employees. However, under these extreme and unavoidable circumstances, we are forced to implement a graded salary deferment for some employees. We are ensuring that most of our colleagues, including those in the lowest pay grades, are not affected at all by this deferral and will be paid salaries in full. […] This is only a temporary measure and the deferred amount will be paid by the company in full once conditions improve.”