Helicopter companies have decided to slash the basic salary of their pilots and engineers for April by 65 percent as they move to cut costs amid the deepening coronavirus pandemic.

Airlines flying fixed-wing aircraft are expected to follow suit.

"The Airlines Operators Association of Nepal has agreed to the pay cut that is aimed at addressing the immediate threat to the business in the face of Covid-19," said Yog Raj Kandel, spokesperson for the association. The decision was implemented on Wednesday.

The deductions may be spread out over a period of three months or longer.

Helicopter pilots will receive a basic salary of Rs75,000 to Rs100,000 after the revision. Normally, they earn Rs500,000 to Rs600,000 monthly.

Engineers will receive Rs35,000 to Rs75,000. Salaries for the key posts in the company will be between Rs25,000 and Rs50,000. The rest of the employees will be paid not less than Rs13,450.

There are 10 helicopter companies in Nepal employing more than 30 pilots.

"Domestic airlines are facing an unprecedented impact as they have been grounded for the last two weeks. It's uncertain how long the lockdown will continue," said Kandel. "All the information and decision to this effect will be communicated to the Tax Office and the Department of Labour."

Fixed-wing aircraft operators like Buddha Air have also decided to cut the salaries of their employees, but they are yet to decide by how much.

Birendra Bahadur Basnet, managing director of Buddha Air, said that they would review the salaries of all employees, and that the cuts would be made proportionately.

"The employees have also agreed with the management's decision to review their pay," he said. The reduction will be implemented from April 1. "It's a crisis situation. We have no other alternative to remain in business," he said.

Even if the lockdown is withdrawn, there won't be any passengers except a few travelling on emergency business, he said.

"The pandemic has brought down the tourism industry to near collapse. Operators of short takeoff and landing (STOL) aircraft and helicopters will be affected the most as tourism recovery will take time," said Basnet.

A fixed-wing aircraft pilot who did not wish to be named said that most pilots were on paid leave. "It's an unpopular decision, but the employer doesn't have any alternative," he said.

Basnet said that even a 20 percent reduction in salaries would be a big respite for airlines during this crisis period.

The outlook for the airline industry has worsened globally as governments across the world imposed widespread travel bans that brought passenger air transport to a virtual halt.

"We are expecting the tourism industry in Nepal to return to normal next year," said Basnet.

The association, the airlines’ main trade body, said the majority of carriers were at risk of running out of money within two months.

Since March 24, followed by the decision of a high-level committee, all domestic flights had been halted for a week. The ban was extended until April 15.