GoAir, which has rebranded itself as GoFirst, has filed a draft red herring prospectus (DRHP) with Sebi for an initial share sale worth Rs 3,600 crore. In the DRHP, the budget carrier has revealed receiving legal notices from pilots threatening criminal proceedings over non-payment of dues.
The airline received 13 notices from its pilots, alleging “mental trauma, cheating, agony, harassment and breach of trust”, the company said in DRHP, which is a preliminary registration document prepared by merchant bankers for a prospective IPO. It spells out reasons for the company’s need to raise funds from the public, how the money would be used and the risks involved.
Read: GoAir, Wadia-promoted low-cost airline, files DRHP for IPO
The pilots have threatened criminal proceedings against GoAir or its officials for the alleged failure in paying the statutory and contractual dues under the employment contract entered and the services rendered by the pilots or termination or sudden termination of the employment contract, the airline said.
So far, no legal proceedings have been initiated, said the airline. The DRHP comes at a time when the aviation sector has run into fresh turbulence even before it could come out of the last year’s round of COVID-induced lockdown.
With airlines operating on less than desirable capacity, many resorted to layoffs, pay cuts and leave without pay to cut costs.
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Go Air had in May 2020 announced a salary cut for pilots and other employees. As per a Hindu BusinessLine report, GoAir has imposed a 30 percent salary cut for pilots since the last lockdown in March 2020, and a 10 percent cut for flight dispatchers.
The airline also proposed a restructuring of pay for the employees this fiscal. However, due to the resurgence of infections and restrictions on travel, the restructuring has been put on hold.
In the financial year ended March 2020, the airline reported a loss of Rs 1,270.74 crore, while total income stood at Rs 7,258.01 crore.
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In addition to legal notices from employees, the airline has also received 10 notices from various passengers alleging “cheating, criminal misappropriation, criminal breach of trust, mental agony, negligence, fraud, bodily harm and trauma”.
The passengers sent notices for alleged deficiency in such as cancellation, booking of tickets, damage to baggage and delay or rescheduling of flights, the airline said.
At present, there are two operational carriers listed on domestic bourses Indigo and SpiceJet.
Read: GoAir rebrands as Go First; promises cheaper fares, young fleet
After announcing the airline’s rebranding as Go First, CEO Kaushik Khona said the airline stayed resilient during the really tough times of the past 15 months.
“Even as the times continue to be extraordinary, GoFirst sees opportunities ahead. This rebranding reflects our confidence in the brighter tomorrow,” he said.
