GoAir on Monday said it will defer and part-pay salaries to a majority of its staff because of revenue constraints due to the lockdown imposed to contain COVID-19 pandemic.
In a joint letter, GoAir Chairman Nusli Wadia and MD Jeh Wadia wrote to employees informing that there is “no inflow of cash” due to suspended operations.
They said the management of GoAir was forced to take this unfortunate decision as it has received no support from the government or banks during the lockdown which saw operations being grounded.
They added that the company is “left with no choice” but to pay the March earned salaries over March and April. It may be noted that the entire aviation sector is struggling to pay remuneration to employees as operations continue to remain suspended due to the nationwide lockdown. Though GoAir has managed to pay full salaries to 40 percent of total employees (2,500), it said the remaining employees are getting paid on a graded or deferred basis.
“With no inflow of cash, which we are now anticipating will continue through the end of May, a period of over 10 weeks, and with no support forthcoming yet from either the government or banking system, we were left with no alternative but to make the unfortunate and sad decision to pay the March earned salaries over March and April,” the joint letter said.
“The limitations on our resources are not of our own making and the sacrifices we are imposing on you are sadly beyond our control.”
In the letter, it was also mentioned that GoAir’s board members, chairman, and managing director are not drawing any remuneration. CEO has taken a 50 percent pay cut and voluntarily deferred most of his balance compensation. The senior management, too, has taken substantial pay cuts and have also deferred a portion of the compensation.
India’s aviation sector, including airlines, airport firms, ground handling companies, and airport retailers, is expected to post losses of $3 billion-$3.6 billion in the June quarter because of the hit to operations, according to aviation consultant Capa India. Indian airlines have sought short-term relief and bailout packages from the government.
Following the near-grounding of operations, airlines like Vistara, AirAsia India, Air India, SpiceJet, apart from GoAir have initiated measures like salary cuts and leave without pay for its staff to contain escalating costs.
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