Despite conditional regulatory approval, Go First flight revival plan fraught with strong headwinds

Moments after news came in of the aviation regulator the Directorate General of Civil Aviation granting conditional approval to Go First’s proposed resumption plan, the airline’s CEO asked staff at the company headquarters in Mumbai to share the good news widely.

“We are here to see that we are back into the skies not only to operate 116 flights, which we have planned, but we will also get more engines and we will fly more,” Khona said amid cheers from an apparently relieved staff Friday evening.

The LCC had sent the global aviation industry into a tizzy after it applied for a “voluntary bankruptcy resolution” with the National Company Law Tribunal (NCLT) on May 2, claiming that technical glitches with next-generation engines supplied by Pratt & Whitney (P&W) had hit normal operations leading to mounting losses. It also announced the suspension of all flight operations from the following day.

However, the carrier’s flight path to revival continues to be fraught with strong headwinds, a cross-section of industry experts told Business Today.

A leading aviation lawyer felt that the DGCA’s approval of the resumption plan had raised some serious questions.

“For instance, how can the airline resume operations when the leases have been terminated by the lessors? Also, since the leases are no longer valid, the certificates of registration of each of the leased aircraft have expired in accordance with the Aircraft Rules, 1937.”

The person, therefore, asked how could the regulator permit an aircraft, whose certificate of registration was no longer valid, to fly.

Approval contingent on legal outcome

Others said navigating the twin challenges related to the availability of interim funding to resume operations and the outcome of petitions filed by lessors in the Delhi High Court and NCLT may not be easy for Go First.

“With most of the leases having been terminated by the lessors and with Delhi High Court in its interim order on the writ petitions filed by various lessors against DGCA to deregister the aircraft, prima facie holding that Resolution Professional is not required to take control of the aircraft, it will be challenging for Go First to commence operations in near future,” observed the founding partner at the law firm AviLeague Partners, Salil Arora.

He further observed that it would be interesting to see if Go First had enough airworthy planes to resume operations.

Taking cognisance of the DGCA’s last condition on approval being granted pursuant to court proceedings, an industry insider requesting anonymity said Go First lessors would want their aircraft returned.

“At this time when a globally stressed aircraft supply chain means new narrowbody aircraft are not readily available, a lessor would always want to place the aircraft with customers in safer jurisdictions,” the person said.

Therefore, the final outcome of the court proceedings may ultimately result in policy and laws concerning the aviation sector getting overhauled.

The next Delhi High Court hearing on the matter is scheduled for August 3.

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