Troubled airline Go First faces fresh challenge as more employees resign

According to a Moneycontrol report, the employees haven’t received salaries for three months despite assurances.

When Go First declared voluntary bankruptcy on May 2, it had around 7,000 employees. The airline, owned by the Wadia Group, ceased its operations and filed for insolvency resolution citing a financial crisis due to the unavailability of engines and spare parts, which led to the grounding of half of its aircraft fleet.

"Employees are frustrated as salaries have not been paid for May, June and July, despite promises of retention bonuses and a quick restart," a senior executive working with the airline was quoted as saying by Moneycontrol.

However, after the initial rush for the exit in May, employees leaving the company reduced.

"Around 20 people would quit every week, but that was expected. Most employees with five-plus years of experience with the airline were standing with the airline," the executive said.

Since the beginning of August, there has been a rise in employee dissatisfaction and resignations have increased.

"Around 150 employees, including 30 pilots, 50 cabin crew members and 50 ground handling and engineering employees, have put in their papers in the last two weeks," another executive working with the airline said.

According to another company official, the morale of employees has taken a hit following the Supreme Court's decision on August 7 to decline Go First's plea to challenge a Delhi High Court ruling. This ruling permitted the lessors to examine and conduct maintenance activities on their 30 leased aircraft twice a month.

The report quoted another employee as saying that if salaries are not disbursed promptly, a wave of resignations is anticipated.

“We are working tirelessly to resolve these challenges and restore normalcy as early as possible," Shailendra Ajmera said told Moneycontrol in an email.

Go First's CEO Kaushik Khona had also previously announced that salaries would be processed by August 10, but employees who were interviewed by Moneycontrol have confirmed that salaries have not been received.

In a recent employee discussion, Khona highlighted the difficulties encountered by the airline in securing its funds held with banks.

He emphasised that Go First has been facing issues in accessing amounts of Rs 5 crore and Rs 35 lakh from Central Bank of India and IDBI Bank, respectively.

Khona also mentioned that the airline managed to obtain Rs 56 crore over the last few months despite not conducting any operations, and this sum was utilized to cover insurance premiums and provide salary advances, said the report.