In the communication to the company’s employees on Sunday, Wadia Group Chairman Nusli Wadia and GoAir Managing Director Jeh Wadia also said the carrier remains focussed to restart operations and resume flights as soon as the lockdown is lifted with a full recovery of its network anticipated within a few months.
“The world over, airlines are getting substantial financial support from governments to tide over this unprecedented crisis (coronavirus pandemic), primarily to enable them to meet employee requirements, and also to sustain and restart operations and maintain the viability and structure of their balance sheets,” GoAir said in the communication.
These airlines have also been given substantial support from banking systems with the help provided by federal banks, it added.
“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,” it said.
GoAir said the airline has been requesting the Indian banking system for financial support but they have not yet reached a conclusion on how they should financially support the airlines despite various advisories from the RBI, it said.
The airline had very little revenue in the first 17 to 24 days of March and zero revenue thereafter, GoAir said adding that it also has to meet all its expenses and liabilities toward its stakeholders such as lessors, suppliers of fuel and engineering, airports and other major expenses.
The nationwide lockdown to curb the COVID-19 pandemic was imposed with effect from March 25 and commercial flight operations have remained suspended since then.
“Despite the lack of government support, GoAir released full salaries to about 2,500 less fortunate employees, equivalent to 40 per cent our workforce, with the remaining employees getting paid on a graded and deferred basis,” the company said.
With no inflow of cash, which the company anticipates will continue through the end of May, and with no support forthcoming from either the government or the 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 airline added.
GoAir said it has closed the sale of all tickets on flights operating through May 31 upon instructions from the government, adding,” we do not expect to resume commercial flying prior to June 1, but we are in continuous touch with the Civil Aviation Ministry and are monitoring the situation closely.”
The airline also said it has been in continuous touch over the past several weeks with the aviation ministry and the government for financial assistance and structural changes, both fiscal and non-fiscal, but so far no concrete measures have been forthcoming.
“However, our discussion with lessors, partners and suppliers is progressing with most industry related players
being understanding and willing to work with us to try to find suitable solutions,” it added.
“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 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 said.
GoAir CEO has taken a 50 per cent pay cut and voluntarily deferred most of his balance compensation, and the senior management too have taken substantial pay cuts and have also deferred a portion of their compensation.
It also said in preparation to resume operations the airline has reviewed and is executing all the requirements related to health and safety in the context of the pandemic.
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