Image Credit :- The economic Times
After a lapse of more than two months, the cash-strapped Go First (formerly known as Go Air), finally got a nod from the Directorate General Of Civil Aviation (DGCA), to resume its scheduled flight operations.
A crisis story Foretold
The low-cost airline, facing a constant cash crunch, which has been operating for 17 years, ceased its flight operations on May 3. The airline faced a significant reduction in cash flow as it grounded over half of its fleet over the troubles with faulty Pratt and Whitney Engines. All advance-booked tickets were refunded to the passengers subsequently.
Following the crisis, the airline owned by the Wadia group was actively exploring options to attract strategic investors to rescue Go First. However, the talks with potential investors to secure a potential partnership didn’t work out.
Consequently, the airline was admitted into the Insolvency and Bankruptcy Code (IBC) on May 10 owing to default in making payments to various lenders including Deutsche Bank, Bank Of Baroda, IDBI, and Central Bank Of India.
However, This crisis was not the one of its kind in the Indian Aviation Industry as it followed the league of the likes of Kingfisher, Jet Airways, Air Sahara, and several others which filed for bankruptcy over the years due to various reasons including high debt, rising fuel prices and intense market competition.
In a recent development, DGCA on Friday emerged as the lifeline for Go First and issued a notification stating its acceptance of Go First’s proposed Resumption plan. However, the DGCA specified that the airline must adhere to specific conditions. This decision follows the recent call for Expressions of Interest from potential buyers by Go First’s Resolution professional, Shailendra Ajmera, to speed up the sale process.
According to the aviation regulator’s notification, Go First is permitted to resume its scheduled flight operations once it secures interim funding and receives approval for its flight schedule from the DGCA. Aviation Watchdog DGCA had earlier sought additional information after the special audit of the airline’s facilities in Delhi and Mumbai, which was provided by the airline on July 19, following which DGCA gave a which was provided by the airline on July 19, following which DGCA gave a conditional green signal to the airline.
The airline is expected to resume operations, employing 15-18 aircraft and 130 flights per day initially, which is aimed to scale it up to 160 flights per day and up to 22 aircraft in the following week. The sale of tickets can only begin after DGCA approves the flight schedule. Also, before deployment for operations, each aircraft must undergo a satisfactory handling flight, taking into account resources like qualified pilots, airworthiness of aircraft, and interim funding requirements. Flight operations will be contingent upon the proceedings and results of the ongoing Corporate Insolvency Resolution Process (CIRP) at NCLT, New Delhi.
