Coronavirus: GoAir says all employees will have pay cut in March

Our Bureau Mumbai | Updated on March 25, 2020

During the last few weeks, GoAir has already taken some cost cutting measures

No-frills airline, GoAir is likely to cut salaries of its employees across the board due to loss of revenue because of the coronavirus lockdown, said sources.

As the number of coronavirus positive crossed 500 on Tuesday, the Prime Minister on March 24 announced a complete lockdown in India. On Sunday, the Ministry of Civil Aviation (MoCA) and the Railway Ministry had announced the suspension of all domestic flights and passenger trains.

According to people in the know, GoAir will cut salaries of all its employees. “GoAir has no option but to cut the salaries. There is a complete lockdown, we cannot operate flights and it is difficult to keep the company going like this. We have made huge losses on our revenues. We are trying our best that the lowest in the strata of employees do not get affected but it is paramount that we do it in order to sustain the company.”

This means that no employees will have to go on leave without pay but instead take a salary cut. On March 17, GoAir had initiated a short term and temporary rotational leave without pay program that will not only help the company counter the short term reduction in capacity, but will also ensure that a cross-section of our employees stay away from the workplace to ensure business continuity.

On March 17, a GoAir spokesperson had at that time said that was "forced to take certain measures,” knowing that “this will put a financial burden on the affected employees and having studied what companies have done in other countries to help guide our plans, this decision was not taken lightly.”

GoAir had temporarily suspended all their international operations, between 17th March 2020 until 15th April 2020. Prior to the temporary suspension of flights because of coronavirus, GoAir used to operate 330 daily flights to 24 domestic destinations and 7 international destinations.

In a recent report, the Centre for Asia Pacific Aviation India (CAPA India) had said that Indian aviation industry, excluding Air India, will incur losses worth $500-600 million in the Q4 of FY20 because of the Coronavirus pandemic. CAPA warned that if the government did not intervene, several Indian airlines will shut down operations by May or June due to a lack of cash.

CAPA had said that the reduced scale of operations could impact the requirement for around 30 per cent of airline staff and up to 50 per cent of ground handling staff. For the first couple of months this could potentially be handled through mandatory leave and leave-without-pay initiatives for 1-2 months.

When contacted the company’s spokespersons on Wednesday remained unavailable to comment.

Published on March 25, 2020

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