Vistara is introducing a three day leave-without-pay (LWP) program for its pilots starting this month. The new unpaid leave comes above the salary cuts previously put in place, as the airline struggles with low demand. The new policy will affect around 500 pilots, who will see a 30% pay cut in total.
Pilots see cuts
Under the new program, pilots will take three days of unpaid leave every month, roughly a 10% salary cut. This leave comes in addition to the previously reduced base flying allowance for pilots. The move will affect the 500-odd pilots flying for the carrier and comes after Vistara sees struggling demand in the short term.
With all the changes included, pilots will see a total salary cut between 28% to 32%, depending on whether the reduction is from their original pay or current pay. Vistara is prioritizing saving jobs during this crisis and has not announced any workforce reductions yet. The current policies will also be reviewed monthly and will be reversed once revenue returns.
Compared to other airlines, Vistara’s cuts seem quite conservative. SpiceJet announced it would not pay pilots for two months during the crisis, along with steep pay cuts, and IndiGo said it is letting go of 10% of its staff.
Lower demand
In the last few months Vistara has taken a number of decisions to face the reality of low demand. The airline is in talks to defer aircraft deliveries from both Airbus and Boeing, pushing back dates for its 787 and A320 fleet. The airline did take delivery of its second 787 and first A321neo in the last two months, but will likely delay any more deliveries.
As mentioned before, Vistara has made relatively fewer cuts to its workforce. The airline enacted a 5-10% pay cut for around 40% of its staff in June and has put many of its crew on short unpaid leave. Pilots were originally exempt from these initial pay cuts but the prolonged downturn has meant the airline must make more cuts.
International expansion
While 2020 was supposed to be Vistara’s year to rapidly expand internationally, the carrier has taken a slower approach due to the current situation. The airline started long-haul flights to London last week, and plans to add two more European destinations for now. Other possible destinations such as Japan and Australia seem to be out of the picture.
With travel demand not expanded to bounce back for at least a few years, Vistara is slowly adjusting its expectations to meet that goal. For now, the carrier will continue to operate limited domestic and international flights until demand returns. The airline is also hoping not to lay off any employees, but as the crisis drags on, that message could change.
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