A delay in sourcing fresh debt and challenges in accessing available funds from banks has put further strain on Go First and increased employee discontent.
The Wadia-group airline suspended operations on May 2 and was admitted into insolvency on May 10. Three months on nearly 1,500 employees have quit and those remaining have not been paid for past salary for past three months.
In an employee email on August 6, resolution professional Shailendra Ajmera said that the airline’s cash flows have been impacted due to challenging circumstances. “We are working tirelessly to resolve these challenges and restore normalcy as early as possible, Ajmera said.
Interacting with employees, the airline’s chief executive officer Kaushik Khona expressed hope about receiving certain payments by August 10. “While Ajmera is trying to raise funds from his end, I am supplementing the effort,” he said.
Khona highlighted the challenges faced by airline in accessing funds available with banks. He pointed out that airline has been unable to access ₹5 crore and ₹35 lakh from Central Bank of India and IDBI respectively.
Khona said the airline was lucky to secure ₹56 crore in past few months despite zero operations and this amount was user to pay insurance premium and salary advance.
Another instalment of aircraft insurance premium of ₹11-12 crore is due on August 14. However, banking sources have said the airline may not get its interim funding by August 10 though they maybe able to get some funds “but not from all banks. Ajmera said that the payment of insurance is very important. Rightly so, whenever a bank lends money, or issues a letter of credit for an asset, it has to be backed by insurance, it is critical.”
Notice period
Meanwhile, employees have been requested to complete their three-month notice period. This isn’t going very well with the employees who want to find other jobs.
Ajmera said that the employee cooperation is necessary to restart airline after DGCA approval. While acknowledging the strain on employees seeking early role releases, the company, in consultation with management and department heads, has opted to defer such releases in the interest of preserving human capital vital for a successful resumption of operations. Ajmera assured them of his commitment to expedite the resumption process, engaging with stakeholders to secure funds.
In a six-page FAQ list, sent to all employees, Ajmera clarified that even those employees who wish to quit must complete their three-month notice period. Not only that, he said that salaries, as a part of the full and final will be paid only as and when other employees are pair salaries for the respective month