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GoAir may extend leave without pay till September, more than 90% employees impacted

Leave without pay for many employees was to end on June 30

June 30, 2020 / 04:58 PM IST

Low cost airline GoAir has put in plans to extend leave without pay, or LWP, for its employees till September. As of now, the arrangement was in place till June 30.

LWP, which was initially till May 3 - when the lockdown got over, was later extended till June 30.

Industry officials said at least two executives from the senior management have been asked to take early retirement. "But apart from that, there haven't been any layoffs till now," said a senior executive from the industry.

At the same time, another executive pointed out, about 95 percent, or 6,400, of the airline's 6,700 employees have been sent on LWP. "Only the bare minimum number of employees have been retained," said the executive.

Speaking on the conditions of anonymity, executives close to the airline said the company has chosen to send employees on LWP, instead of terminating them, to avoid paying severance package. "LWP is worse than firing," commented one executive.


Moneycontrol has reached out to the airline for comments, and will update the story once it responds.

GoAir had resumed operations on June 1, a week later than its peers who had restarted services on May 25. Since then, the government has further allowed airlines to operate up to 45 percent of their capacity from the earlier one-third. But industry executives point out that most of its flights are running at half their passenger loads.

Days before it resumed service, GoAir had revised the salary structure of its senior pilots, many of whom will see their pay cut by over 50 percent.

For a few, depending on their flying hours, the cut could be as much as 65 percent. For instance, a senior captain could see his monthly gross salary plummet to Rs 2.5 lakh from over Rs 7 lakh.

Executives told Moneycontrol that the airline continues to revise contracts of pilots. "As everything now depends on the flying hours, pilots are reluctant to take leaves and are flying even when they shouldn't," said a senior executive.

GoAir is not the only one forced to put in strict measures to cut costs. Peer IndiGo, SpiceJet and Vistara have also taken several measures, ranging from pay cuts to extending LWP.
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Jun 30, 2020 04:58 pm
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