‘Bankrupt’ Go First Aims The Sky Again, Hopes Resumption Of Ops In Two Weeks

Last Monday, the civil aviation regulator, DGCA, had directed the airline to immediately stop ticket sales and issued a show-cause notice for its failure to provide efficient and reliable services.

New Delhi: Wadia Group-owned Go First airlines is hoping to will restart its operations in the next two weeks, by May 24, ET reported quoting people aware of the development. This comes after the New Delhi bench of the National Company Law Tribunal (NCLT) on 10 May 2023 granted bankruptcy protection to the airline.

“The expectations are that none of Go First’s aircraft will be taken away by lessors which will let the airline return to the skies in around two weeks at the earliest,” a source aware of the ongoing discussions told Moneycontrol.

Last Monday, the civil aviation regulator, DGCA, had directed the airline to immediately stop ticket sales and issued a show-cause notice for its failure to provide efficient and reliable services.

“After the meeting with resolution professional the airline will submit a resumption plan to DGCA which will include the total number of aircraft and the destinations it intends to operate,” said a unnamed person quoted by ET.

NCLT Order On Go First

On Wednesday, the NCLT on Wednesday admitted the company under the voluntary insolvency resolution process.

As per the court order, lessors have been restrained from recovering pending dues or terminating aircraft lease agreements and also forbids airports from cancelling the airline’s slots. Lessors had filed deregistration requests for 46 aircraft which now stands invalid.

“This is a historic and landmark judgement. It is also a perfect example “in the context of revival of a viable business before it becomes unviable,” airline’s CEO Kaushik Khona said, adding that they are looking to resume as soon as possible.

“This is the best thing that could happen for the airline. The plan of action will now include IRP to discuss on refunds and resumption of flights. Our job was to see that airline does not go down and does not lose its aircraft, now everything is in IRP’s hands,” Khona added.

Go First Hopes To See The Skies Again

Go First is hoping the interim resolution professional, Abhilash Lal of Alvarez & Marsal appointed by the NCLT on May 10, will help negotiate a treaty between the lessors and the airline that will help Go First restart operations.

“The resolution professional will meet Go First’s top management and employees in the next couple of days, after which the plan is to approach the Ministry of Civil Aviation and Directorate General of Civil Aviation to restart operations,” said the official mention in the Moneycontrol report.

As per the report, the airline is planning to restart operations with around 20 aircraft to operate around 1,200 flights a week and slowly scale operations as an insolvency resolution plan is discussed.

Go First Goes Behind P&W

On April 28, Go First had moved an emergency petition before the Delaware Federal Court, calling for a legal order to force P&W to comply with two arbitral awards issued by the Singapore International Arbitration Centre (SIAC).

On March 30, the SIAC had asked P&W to provide Go First with at least 10 serviceable engines by April 27 and the remainder by the year-end. After P&W refused to comply, the SIAC issued a second arbitral award on April 15, asking the US company to fulfil its order.

Go First had on 2 May 2023 announced it had filed an application for voluntary insolvency resolution proceedings before the NCLT, Delhi due to a “severe fund crunch”.

Damages Sought

Go First CEO Kaushik Khona had last week said that for every month since November last year, Go First was burning around Rs 200 crore of cash every month. No longer able to afford it, it had to resort to filing for insolvency before the NCLT, said Khona.

He said Go First needs at least 20 aircraft to return to service and break even on daily operations. The company is seeking $1.1 billion in damages from the engine maker, whom it blames for the airline’s collapse.

“We have already crossed 20,000 aircraft on ground (AOG) days in the last three years, losing almost $55,000 each day. This means that my compensation alone, or my loss, which I can claim from Pratt & Whitney alone, will be around $1.1 billion,” Khona had said.

“To ensure this happens, we will tap into many more jurisdictions across the world, some of which are in the US, one in Germany, one in Japan and maybe one or two more in Europe and Singapore,” he added.

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