HomeAviation NewsGoAir Chairman writes to employees, says no concrete support package forthcoming

GoAir Chairman writes to employees, says no concrete support package forthcoming

The airline has been seeking financial assistance and structural changes for the domestic aviation industry.

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By Anu Sharma  May 4, 2020, 1:03:52 PM IST (Updated)

GoAir Chairman writes to employees, says no concrete support package forthcoming
GoAir Chairman and Managing Director have written to the employees informing them that while airlines have been pursuing fiscal and non-fiscal measures from the government, no concrete measures are forthcoming.


The airline has been seeking financial assistance and structural changes for the domestic aviation industry, individually and as part of the airlines group.

"We have also been in continuous touch over the past several weeks with the ministry of civil aviation and the government for financial assistance and structural changes, both fiscal and non-fiscal, both individually and together with the other Indian airlines, but so far, no concrete measures have been forthcoming," Chairman Nusli Wadia and Managing Director Jeh Wadia wrote to employees in a mail dated May 3.

(Also read: Domestic air traffic falls 33% in March due to COVID-19 pandemic)

The airline is still vigorously pursuing options similar to those being implemented in other countries to help employees.

"The world over- the US, Europe, UK, South/East Asia, the middle east, the airlines are getting substantial financial support from their governments to tide through this unprecedented crisis, primarily to enable them to meet their employees requirements, but also to sustain and restart their operations and maintain the viability and structure of their balance sheets....we continue to vigorously pursue similar options with our government so that we can, most importantly, improve the position of our employees and also the sustainability of our airline," the Wadias said.

As the revenue streams have completely dried up since March 25, the New Delhi-based airline has also asked the banks for financial support but so far, the discussions have been inconclusive.

"We have likewise been requesting the Indian banking system for financial support but they have also not yet reached a conclusion on how they should financially support the airlines despite the various advisories from the RBI," the Wadias added.

However, the discussions with lessors, suppliers, partners are progressing and most industry players are willing to find suitable solutions to issues, they said.

Anticipating zero cash flow through May indicating nil flights, the airline said that it is ready to resume operations in a phased manner as soon as the government announces flights resumption plan and will aim for full recovery of the entire network in a few months.

GoAir has not witnessed any lay-offs so far but it had implemented a policy of leave without pay for almost 90 percent of its employees with effect from March 25 until May 3, the period of phase one and two of nationwide lockdown.

It is important to note that domestic passenger flights in India are banned since March 25 and even as a partial lockdown is extended by two weeks till May 17, no announcement has been made so far regarding flights resumption so far.

In the letter to employees, the Wadias said that GoAir has released salaries to 2,500 "less fortunate" employees in a graded and deferred basis.

"With the exception of 2,500 employees, who are the least fortunate amongst us in the GoAir family, we were also forced to place a substantial portion of our employees on temporary leave without pay," the Wadias wrote.

The airline anticipates that the phase of "no inflow of cash" will continue through the end of May, taking the period of no revenue to 10 weeks.

Chief Executive Officer Vinay Dube, earlier CEO of now defunct Jet Airways, has decided to take a 50 percent pay cut and has voluntarily deferred most of his balance compensation and other senior executives have also taken "substantial" pay cuts and deferred portion of their compensation.

"Our board, Chairman and MD draw no remuneration whatsoever," the letter added.
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