The Indian Aviation Sector has been hit badly due to the global pandemic. The domestic and international flights have been suspended for over two months. As the lock-down has extended twice. Go Air has about 2500 employees and paying salary to each one of them means the company having enough savings for the time being. As per the sources Go Air has managed to pay full salaries to 40% of its employees while the remaining employees are paid on a graded or deferred basis.
As the company does not have enough cash reserves to pay each employee their timely salary and no support from the government at this point in time is seen.
The chief executive and managing director of the company wrote a joint letter to the employees explaining that due to no inflow of cash as the airlines are suspended for the time being and it’s been over a month now to contain the spread of the virus but nothing is in favor of the aviation sector. This pandemic has left the company with no choice but to pay March salaries over the months.
As anticipated by the company there is no cash flow within the company till the end of May which is certainly difficult to go on for 10 weeks with no financial support and thus the decision to pay the salary of March over the months had to be taken.
Unfortunately, the private airline has been forced to send people on leave without pay due to the crisis. The top management, CEO, board members, and chairman are not drawing any remuneration.
CEO of the company has taken a 50% salary cut voluntarily and the top management has taken substantial salary cuts and deferred portions for compensation.
The condition remains the same for a few months and thus the company should be prepared for future occurrences and consequences.