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July 21, 2024
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Delhi-based low-cost airline IndiGo is offering its employees a one-and-a-half-month salary as a bonus. The news was sent to them in an internal email. IndiGo enjoys an over 60 percent market share in the domestic market in India. Moreover, the airline is growing rapidly and needs its people.

The bonus is announced in conjunction with the anticipated profit that the airline will announce sometime this month.

Commenting on the bonus that IndiGo is going to pay its employees, Satyendra Pandey, Managing Partner, Aairavat Technology & Transport Ventures Private Ltd said that the airline is on the anvil of reporting Q4 results and all indications are that earnings will be extremely strong. “AT-TV estimates that IndiGo will end the financial year with profits in the $ 900 – $ 950 million range. This is driven by soaring demand, strong yields, strong sale, and leaseback inflows, compensation by engine OEM, strong ancillary revenues, and IndiGo’s dominant 60 percent + market share,” he says. The last time that IndiGo registered a profit was in FY19 after which the COVID pandemic broke,

Pandey adds that the industry is intensely competitive and already signs of discounting are evident. On the staffing front, talent is now at a premium. Additionally, across the industry, there is friction with pilot groups driven by the crew rest rules that were almost implemented but then deferred.

He adds that IndiGo has seen attrition in departments, and competitors, notably Air India and Akasa, attracted talent. At the same time, hiring from the Middle East is picking up and IndiGo has to factor this into its growth plans.

The bonus is 1.5 times basic pay. As such it cannot be compared to similar bonuses paid at airlines like Singapore Airlines and Emirates. Yet, it is a strategic and timely decision. It not only rewards the front lines who have contributed to IndiGo’s success but, in some part, will also help stem attrition and provide cover for some other attacks – on fare levels, on the airline’s dominant position, and on executive compensation – that is all but certain,” Pandey points out.

IndiGo joins the growing ranks of airlines, that are rewarding their staff now that passengers carried by most airlines have recovered from the beating that the global airline industry received during COVID.

In 2023, Singapore Airlines announced that its staff would be receiving around eight months of salary as a bonus after the company posted a record annual profit.

This is the highest profits that the company has posted in its 76-year history, reported Bloomberg

In the same year, the Dubai-based Emirates announced that its staff would receive a 24-week bonus on top of their salaries

author avatar
Ashwini Phadnis
Former Senior Deputy Editor at Business Line (aka The Hindu Business Line)

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