June 16, 2024


Delighting finance buffs

Left with no choice: GoAir writes to employees about deferred salaries

The chairman and managing director of low-cost carrier GoAir said the airline has no money to pay immediate salaries to all its employees, as the company has not yet got any relief from either the government or the country’s banking system.

GoAir Chairman Nusli Wadia and MD Jeh Wadia wrote a joint letter to employees informing that there is “no inflow of cash” due to suspended operations.

They said 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 per cent 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.”

The airline, like many others, has been forced to send people on leave without pay due to the current situation.

In the letter, it was also mentioned that GoAir’s board members, chairman and managing director are not drawing any remuneration.

“Our CEO has taken a 50 per cent 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.”

Finally, the letter also spoke about how airlines in the US, Europe, South/East Asia and the Middle East are getting substantial support from their respective governments to tide them through this “unprecedented crisis”.

The letter also pointed out that most of these airlines have also got additional support from their respective banking systems with the help provided by federal banks.

“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.”

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