GoFirst
Go First may start services soon after NCLT approves insolvency plea: Report
Mumbai: Cash-strapped budget carrier Go First may resume regular flights soon as it plans to go business as usual after the National Company Law Tribunal (NCLT) gave its nod to the company’s insolvency plea, paving the way for the airline’s revival.
The airline, owned by the Wadia group, is looking to resume operations from May 24, reported The Economic Times quoting people aware of the development.
According to sources cited by the publication, the airline has developed a business strategy to recommence operations utilizing a fleet of 23 aircraft. A source mentioned in the ET report revealed that the airline had been operating with 27 planes until May 2, and it currently holds 51 departure slots in Delhi and 37 in Mumbai, which are major airports.
Go First intends to make use of these resources and resume operations as soon as feasible. However, the operations will be conducted on a reduced schedule.
According to reports, the airline has engaged in discussions with the government regarding this plan. The suspended management of the airline will hold a meeting with the resolution professional appointed by the court. Subsequently, the resolution professional will approach the government to seek permission for resuming ticket bookings.
It is worth noting that the Directorate General of Civil Aviation (DGCA), the civil aviation regulator, had instructed the airline to immediately halt ticket sales and issued a show cause notice when it abruptly suspended operations from May 3.
The resolution professional is expected to submit a resumption plan to the DGCA, which will outline details such as the total number of aircraft and destinations involved.
Go First's intention to resume operations has come to light following the National Company Law Tribunal's (NCLT) decision to accept the company's voluntary insolvency proceedings. This decision offers protection to the airline's assets and leases by implementing a moratorium.
The CEO of the airline, Kaushik Khona, expressed appreciation for the NCLT's ruling, describing it as a "historic" opportunity. This decision provides a rare second chance for the financially struggling airline to revive itself, which is uncommon in the history of the Indian aviation industry.
In addition to prioritizing the resumption of operations, Go First will also pursue legal action against US engine manufacturer Pratt and Whitney (P&W) in a Delaware court to seek compensation for damages resulting from faulty engines. The airline possesses two arbitration awards from the Singapore International Arbitration Commission (SIAC) in its favor against P&W.
Go First has explicitly held P&W responsible for its financial difficulties, attributing the grounding of over half its fleet of Airbus A320neo aircraft to the supply of defective engines by P&W. However, P&W has refuted the airline's claims and stated that Go First has a history of failing to meet its financial obligations.
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