BENGALURU (Reuters) - IndiGo, India’s biggest airline, said it will cut 10% of its workforce as it grapples with declining revenues due to the fallout from the COVID-19 pandemic.
Airlines around the world have been hammered by a slump in travel demand due to restrictions aimed at containing the coronavirus outbreak, and few expect a quick recovery.
IndiGo in June said it would cut up to 40 billion rupees ($533 million) in costs and speed up the return of older planes to leasing companies.
“These cost savings are clearly not enough to offset the decline in revenues,” Ronojoy Dutta, chief executive of IndiGo, said in a statement.
Impacted employees will get a severance pay and will be paid for the notice period as well, the company said.
IndiGo, which had 23,531 employees on its rolls as of March 2019, said it was flying only a small percentage of its full fleet of 250 airplanes.
Following coronavirus-related restrictions, India allowed airlines to resume flights in May on domestic routes only and at one-third capacity. The country’s aviation regulator earlier this month extended restrictions for international passenger services until July 31.
Indian airlines have, however, been operating rescue flights to bring back stranded citizens living overseas and have so far flown back over 220,000 people from dozens of countries.
Parent Interglobe Aviation (INGL.NS) reported a net loss of 8.73 billion rupees for the quarter ended March 31, including just over a week of India’s coronavirus lockdown.
Reporting by Nallur Sethuraman in Bengaluru and Aditi Shah in New Delhi; Editing by Shailesh Kuber