Air India, as part of cost-cutting measures, has reduced crew allowance and fuel reimbursement limit by 10 per cent for all officers. The steps have been taken in the wake of global coronavirus outbreak, which has claimed over 7,900 lives across the world. The effects of the pandemic have brought most industries to a standstill, with aviation and tourism getting affected the most.
As part of its latest notification, executive entertainment allowance to executive pilots has also been withdrawn with immediate effect. "Layover/subsistence allowance for cabin crew: all cabinet crew (permanent and contractual) rostered for flying from April 1, 2020, will have revised layover allowance of $100 for 30 hours and thereafter at the rate of $4 for every additional hour in excess of 30 hours. In case of URL (ultra-long-range flights), $140 for 30 hours and thereafter $6 for every additional hour in excess of 30 hours," says a statement from Air India ED (finance) SK Singh. The fuel reimbursement limit has for now been reduced to six months starting from April 1. The airline said the decision had been taken to reduce the cost "as far as possible".
Large-scale flight cancellations and poor demand are reflecting on the airfares of airlines across the board, with airlines offering Delhi to Mumbai flight for less than Rs 2,500. So far, the domestic carriers have suspended flights on some international routes, domestic flight schedule still remains intact. But that'll change if the demand stays lull for a longer period, and cases of novel coronavirus (COVID-19) increase in India, say experts.
Air India is also the worst hit when it comes to losses due to coronavirus as it commands the largest international market share - 50.64 per cent (in Q2 FY19) - among domestic carriers. Other airlines like GoAir has also said that it'll suspend all international flight until April 15. The COVID-19, which has affected over 120 countries so far, started affecting the domestic aviation sector from January-end when carriers announced the suspension of flights to countries such as China, Vietnam and Hong Kong. By early March, the list of discontinued international services expanded further to cover at least 15 destinations. As per the industry body IATA (International Air Transport Association), the financial impact of novel coronavirus (COVID-19) could be anywhere between $63 billion and $113 billion in 2020.