Hit hard by Covid 2nd wave, Spicejet to pay employees based on work hours

With the second wave of coronavirus taking a major toll on passenger traffic, domestic flight operator SpiceJet has decided to go back to its compensation structure where employees will be paid on work hour basis. The company will also be deferring up to 35 percent of salary for a section of employees to deal with the business disruption caused by the pandemic.

In an email sent out to its employees on Sunday, the airline stated that India is currently going through one of the worst Covid-19 outbreaks in the world and passenger traffic has fallen to under 10% of pre-Covid levels.

“Much like last year, the second wave of Covid-19 has hit the Indian aviation industry the hardest, but this time the impact has been much more severe especially on our industry. During this second wave the passenger traffic has fallen to less than 10% as compared to the pre-Covid levels,” said the letter from HR to employees.

According to the company’s letter, “During this second wave, the passenger traffic has fallen to less than 10 percent as compared to the pre-Covid levels.”

The airline said that under these “extreme and unavoidable” circumstances, the company is “reverting to the structure where employees will be paid according to the work hours contributed while maintaining basic thresholds.”

“Recognising the sudden surge in the number of active Covid cases across the country, decrease in passenger traffic and load factors, the Government has also recently reduced the capacity cap from 80 percent to 50 percent of the capacity of the pre-COVID level. This sudden drop due to unprecedented surge in COVID cases coupled with varied travel restrictions across India has adversely affected our revenue and cash flows,” read the letter.

In order to deal with the impact of COVID-19 lockdown the budget airline also deferred April salary up to 50 percent for a significant section of employees, PTI reported recently.

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The Civil Aviation Ministry also capped the capacity for domestic flights from 80 percent to 50 percent, effective June 1.

“In view of a sudden change in the number of COVID-19 cases, and decrease in the number of passengers and reduced occupancy, the existing capacity cap of 80 percent is reduced to 50 percent,” the ministry said in an order.