NEW DELHI: Wadia Group-promoted GoAir on Monday said it will defer and part-pay salaries to a majority of its staff because of revenue constraints due to the lockdown imposed to contain covid-19 pandemic.
In a joint letter to the no-frills airline staff, chairman Nusli Wadia and managing director Jeh Wadia said the management of GoAir was forced to take this unfortunate decision as it has received no support from the government or banks during the lockdown which saw operations being grounded.
"Despite the lack of government support, GoAir released full salaries to about 2,500 less fortunate employees equivalent to 40% of our workforce, with the remaining employees getting paid on a graded and deferred basis," the Wadias said in the letter.
"With the exception of 2,500 employees, who are the least fortunate amongst us in the GoAir family, we are also forced to place a substantial portion of our employees on temporary leave without pay," they added.
A copy of the letter has been reviewed by Mint.
Airlines remain grounded and airport operations suspended since 25 March due to a the government-imposed lockdown to contain the pandemic, which has claimed thousands of lives globally. As things stand, the lockdown has been now extended till 17 May.
India’s aviation sector, including airlines, airport firms, ground handling companies and airport retailers, is expected to post losses of $3 billion-$3.6 billion in the June quarter because of the hit to operations, according to aviation consultant Capa India.
Indian airlines have sought short-term relief and bail out packages from the government.
Following the near-grounding of operations, airlines like Vistara, AirAsia India, Air India, SpiceJet, apart from GoAir have initiated measures like salary cuts and leave without pay for its staff to contain escalating costs.
"As such, we don't expect to resume commercial flying prior to 1 June, but we are in continuous touch with the Ministry of Civil Aviation and are monitoring the situation closely," the Wadias said.
"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 other Indian airlines, but so far no concrete measures have been forthcoming," they added in the letter.
A senior official with GoAir said no employee has been let go during the lockdown.
"Deferred payment of salaries and sending portion of staff on leave without pay, was the last resort used by the management as the airline was losing huge amount of money, on a daily basis, on fixed costs without any revenue," the person added, requesting anonymity.
GoAir, since March, has laid off its expat pilots, introduced leave without pay for its employees and announced up to 50% pay cut for its top leadership.