GoAir has paid 40% employees; will pay others on a graded basis: Nusli, Jeh Wadia to staff

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GoAir has paid salaries to 40 percent of its employees, and the rest will be paid on a graded and deferred basis, promoters Nusli Wadia and Jeh Wadia told employees in a joint letter to employees.

The 40 percent is equivalent to 2,500 employees of the low-cost airline.

The promoters also said the airline has been forced to send a substantial portion of employees on temporary leave without pay.

A senior industry executive added that no one has been let go by airline.

"Our Board, Chairman and MD draw no remuneration whatsoever," the two said.

While Nuslie Wadia is the Chairman of the airline, his son Jeh is on the Board. Vinay Dube is the CEO.

Moneycontrol has seen a copy of the mail, sent on May 03.

Like its peers, GoAir has been struggling since the lockdown was announced in March. Even though the government has announced some relaxations in the third phase of the lockdown, flights continue to be suspended. The government, however, as assured that airlines will be given advance notice of flights resumption, to allow bookings.

Without bookings, and under pressure to pay refunds of tickets cancelled, airlines have been forced to cut pay, send employees on leave without pay, and some have also let go of expat pilots.

In talks with government, banks

The two promoters noted that even though they have been touch with the Civil Aviation Ministry and the government for financial assistance, "so far no concrete measures have been forthcoming."

This is despite internationally, nearly all governments lending financial support to their airlines.

"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 Wadia said.

The two, however noted that GoAir is in talks with its lessors and suppliers, who have been 'understanding and willing to work with us to try to find suitable solutions.'

Underlining the financial crunch, the promoters said that the airline has "had very little revenues in the first 17 to 24 days of March,' and nil revenue after that.

With no cashflow, the Wadia said, they were left with no alternative but to make the 'unfortunate and sad decision to pay the March earned salaries over March and April.'