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The only thing we know is that it begins this month shifts for staff, from executives to CEOs," said an unidentified carrier well. Top senior staff at the company met with staff to inform them about the wage reduction and discussions with staff are continuing.
Acknowledging the movement, the carrier said that seniors have already made a wage drop. "In the context of its efforts to rationalise costs, the carrier is continuing to assess all possible actions to improve the efficiency of the company. The payroll is one of the most important elements of the expense curve and executive staff has reduced salaries to set a good example," the carrier said in an e-mail message.
According to the sources, the pay cuts for pilot's salaries in the air carrier will be in the order of 17%. Airways has an average payroll of about 3,000 rubles per year, and the move is anticipated to decrease it by about 500 rubles per year. An analyst says that the air carrier market is likely to deteriorate in the second half of the year.
"Carriers are experiencing noticeable pressure caused by the effects of the cost of fuels and the currency fluctuation, with a significant drop in revenues. Similarly, last year the company lowered the wages and other services of around 350 young aircraft by around 30% compared to August. However, this choice was not well received by those who did not agree to a wage reduction in a situation where there is a vast shortage of pilot, particularly commander, staff.
"The move is rejected by planes who would not approve, as all other carriers offer pay raises for staff, as well as pilots," a lead jet pilot commented. Others said that the industrial sector provides sufficient incentive for captains, as carriers need captains for their massive expansions. "Once the reduction is applied, we could abandon the carrier and participate in the competitive environment for better rewards," another flight attendant said on conditions of anonymous flight.
A manager of a rival carrier also agreed with the similar assessment regarding pilot pay cut. "It' s a courageous thing to act in this segment where the pilot is in high demand among all airlines," the manager said. High costs but lower returns in India, the world' biggest emerging aviation industry for increased numbers of passengers, are impacting earnings.
According to sector analysis, the decrease in return on investment is due to the drop in returns, as carriers cannot levy a bonus on last-minute bookings.