Summary
- Go First is facing a potential wave of mass resignations, with around 150 employees reportedly already quitting in the last two weeks.
- The airline's failure to pay salaries has impacted employee morale.
- Go First is also reportedly seeking urgent funds from lenders to cover mandatory liabilities.
India’s grounded budget carrier, Go First, could see more than 100 employees leave in the coming weeks. Several of the airline’s workers, including pilots, have already left the company, and a new report says that many more have resigned as the airline struggles to pay their salaries.
More resignations?
Go First could be hit with another wave of mass resignations following reports of employees not receiving their salaries. According to Moneycontrol, around 150 employees have resigned in the last two weeks, with a source saying,
“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.”
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An airline executive explained that around 20 people would quit every week before as the airline tried to control the attrition rate. He added that most employees with years of experience with the company were sticking around. But things changed at the beginning of this month amid growing dissatisfaction and doubts over the airline’s future.
Another executive added that none of the departments at Go First had been paid their salaries in the last few months, impacting employee morale. The carrier’s resolution professional (RP) had earlier sent a mail to workers explaining that the current challenging situations have affected Go First’s cash flow.
Legal disputes
Even as Go First plans its return, several legal disputes and court orders in the last few months continue to act as roadblocks. Recently, the Supreme Court of India refused to side with Go First in its appeal against the Delhi High Court's order to allow its lessors to inspect their aircraft.
The Delhi High Court has also ordered the airline not to fly lessors’ aircraft as part of scheduled maintenance. It added that the carrier has been unable to show any urgency or grave imminent threat to these aircraft to suddenly and without any prior notice fly them.
On August 17th, the National Company Law Tribunal (NCLT) issued a notice to Go First regarding a settlement dispute with a logistics company. The carrier’s RP has been given two weeks to provide a reply.
The dispute is with a logistics company called Delhivery, which paid Go First over $190,000 for carrying some cargo. Delhivery added that it paid Go First over a third of that amount on May 2nd, the day it filed for insolvency.
Funding required
All of these developments come close on the heels of reports saying that Go First has asked lenders for funding of $12 million on an urgent basis to cover some of its mandatory liabilities, such as insurance and aircraft repair.
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Indeed, the carrier could use some immediate funding to stop the outflow of the workforce and have enough qualified employees to help it restart operations, if and when that happens.
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Source: Moneycontrol