Wednesday, August 09, 2023

GoFirst crisis: Insurance payment deadline approaches amid unpaid salaries

New Delhi: A delay in sourcing fresh debt and challenges in accessing available funds from banks has put further strain on Go First and increased employee discontent.

The Wadia-group airline suspended operations on May 2 and was admitted into insolvency on May 10. Three months on nearly 1,500 employees have quit and those remaining have not been paid for past salary for past three months.

In an employee email on August 6, resolution professional Shailendra Ajmera said that the airline’s cash flows have been impacted due to challenging circumstances. “We are working tirelessly to resolve these challenges and restore normalcy as early as possible, Ajmera said.

Interacting with employees, the airline’s chief executive officer Kaushik Khona expressed hope about receiving certain payments by August 10. “While Ajmera is trying to raise funds from his end,  I am supplementing the effort,” he said.

Khona highlighted the challenges faced by airline in accessing funds available with banks. He pointed out that airline has been unable to access ₹5 crore and ₹35 lakh from Central Bank of India and IDBI respectively.

Khona said the airline was lucky to secure ₹56 crore in past few months despite zero operations and this amount was user to pay insurance premium and salary advance.

08/08/2023 Forum Gandhi/Aneesh Phadnis/Business Line

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