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GoAir Sees Exodus of Half-a-Dozen Senior Executives Amid Salary Crisis and Leave Without Pay Scheme

Image for Representation. (Picture Source: PTI)

Image for Representation. (Picture Source: PTI)

Like other leading airlines in India, GoAir has also been severely hit by suspension of flight services to curb the spread of coronavirus.

In yet another exodus, GoAir has seen the exit of half-a-dozen senior executives in recent weeks amid the budget airline struggling to pay salaries and keeping a significant chunk of staff on leave without pay, according to two sources. The Wadia group-promoted carrier has around 6,700 employees and around as much as 4,000-4,500 of them are on leave without pay (LWP), one of the sources said.

When contacted for comments on quitting of senior executives, a GoAir spokesperson neither denied nor confirmed the resignations. The airline "continues to assess the current market situation and will align its cost structures with the current flight operations. These are planned furloughs in order to minimise cash burn so that the staff count is aligned to the current scale of operations", the spokesperson said in a statement.

The airlines industry has been grappling with strong headwinds due to the coronavirus pandemic, with many of the carriers laying off people as part of cost-cutting measures. GoAir has also been severely hit by suspension of flight services to curb the spread of coronavirus. Besides announcing paycuts for most of its employees in March, GoAir had also announced the LWP scheme for 60-70 per cent of the staff in April.

The sources quoted above said salary payments to the remaining 30 per cent of the workforce is also not regular. Earlier this month, the airline gave three options to the employees — voluntary resignation, termination and continue on LWP for an indefinite period. Subsequently, more than half-a-dozen senior executives left the airline while some others mulling various options, the sources told PTI.

"The top deck at GoAir is now almost empty. In the last few weeks, the airline's company secretary, vice-presidents for international operations, cargo, procurement, customer services, inflight services, and corporate communication quit the carrier as these people were not getting paid since April on account of LWP," one of the sources said. Besides, three other vice-presidents — sales, legal and marketing — are on LWP, the source said.

"The management also told that those senior executives opting for continuing on LWP will not be recalled, which implies that they are as good as out of the airline," the source added. Last week, the airline appointed Kaushik Khona as its chief executive officer in place of Vinay Dube.

In the detailed statement, the spokesperson said the airline's business model is scalable and to have least of the negative impact of this extreme situation, it took immediate proactive steps to ensure that the airline is able to cut its costs as is prudent with any commercial enterprise. "Airlines worldwide have been deeply impacted and we have heard of several airlines filing for bankruptcy. The airline has attempted to control costs wherever possible and is continually looking at several areas to optimise costs," the statement said.

Given the uncertainty around the current situation and keeping the long-term growth trajectory, the airline will take all possible steps to reduce cash burn as there is no certainty on the demand curve, the statement added. "We are looking at this as a short-term measure to align the cost to the revenue to avoid negative impact of fixed costs," the statement said without elaborating on the short-term measures.

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Further, the statement said the airline is prepared to scale up the business once the negativity due to COVID-19 on the aviation business is seen receding. Simultaneously, the airline continues to explore all avenues of enhancing its business through a review of its systems and processes to improve productivity and emerge from this period, the statement said.

GoAir had witnessed as many as 15 senior executives, including then chief executive officer, chief commercial officer and chief operating officer, deboarding the carrier in just nine months during the 2018-19 period.