Monday, May 04, 2020

No sign of bailout from govt yet, Go Air promoters tell employees

New Delhi: Wadia group promoters Nusli Wadia and his son Jeh said that there have been no signs of help from government and banks to bailout the aviation sector.

The Wadia group owns low-cost airline Go Air, which has sent 90 per cent of its employees on leave without pay till May 4.
The group, which also owns several other companies like FMCG major Britannia and Bombay Dyeing--one of the largest producer of textiles--stated this in a letter to the airlines’ employees on May 3.

In the past, the Wadias had pledged shares worth Rs 80 crore held by a group company to raise debt for Go Air and has also provided a corporate guarantee of Rs 500 crore for working capital limits raised by the airline.
“We have been in touch with the government requesting for both structural changes and financial assistance but nothing has been forthcoming. Likewise we have been requesting the banks but they haven’t also reached a conclusion on how to support the airlines,” the Wadias noted in the letter.

The airline hasn’t yet paid salaries of March except to the lower ranks, which had created dissatisfaction among employees.

The Wadias in the letter also drew comparisons with other western economies that have provided financial assistance to their airlines for payment of salaries and restructuring their operations. “These airlines have got substantial help and financial assistance from their government and banking system,” they mentioned.

India’s airlines and airports, the most impacted by the outbreak of virus, has been seeking help from the government to mitigate the financial impact of the epidemic.
04/05/20 Arindam Majumder/Business Standard
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