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Hit by the second wave of the Covid-19 pandemic, GoAir has decided to hold back the salary restructuring for its pilots.
A letter to the pilots written by Kaushik Khona, CEO of GoAir, seen by BusinessLine , stated that the airline had anticipated higher utilisation of pilots in the coming months; however, “because of second wave and upsurge in the number of Covid-19 positive cases in India, the expected increase in utilisation of aircraft is still not seen.”
India is witnessing a very strong upsurge in Covid-19 cases due to the second wave. “This has impacted the overall operations and has reduced our flying capacity,” Khona said in his letter.
GoAir did not respond to queries sent by BusinessLine . According to sources, there’s been a 30 per cent salary cut for pilots since the last lockdown in March 2020, and a 10 per cent cuts for flight dispatchers. GoAir had proposed a restructuring of pay for the employees this fiscal. However, in light of the reduced operations along with the requirement of pilots, “acknowledging that this will impact the flying hours for our pilots, it has been decided to hold back the implementation of ‘Restructuring of Pay’ as communicated by me on March 26, 2021,” Khona’s note stated.
The earlier compensation structure which was applicable till March 21 will continue. This will ensure that there is no loss of income to the pilots, the company assured.
Along with this, the low-cost carrier had said that it would give ‘other allowances’ to the employees, and that would not be withheld.
Financial woes continue
BusinessLine had reported that for FY20, the airline had reported a net loss of ₹1,278.42 crore, compared to a profit of ₹123.57 crore in FY19. The eroding networth of the airline, topped by the pandemic, was a major concern for its auditors for the airline to sustain as a ‘going concern.’
The debt-strapped airline has revived its plan for a public offering of shares, which has been deferred several times since 2017. The airline is planning to raise ₹3,000 crore in an IPO for a 30 per cent stake in the airline.
In order to pave the way for new investors, Jeh Wadia, promoter of the airline, took a backseat by opting out from the day-to-day functioning of the airline along with onboarding Ben Baldanza as vice-chairman of GoAir.
Baldanza has a vast experience in turnarounds of airlines, and IPOs.
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