Go First crisis: DGCA grants 30 days to airline to submit its revival plan

Aviation regulator Directorate General of Civil Aviation (DGCA) on Wednesday granted a month’s time to cash-strapped Go First airline to submit its restructuring or revival plan for sustainable revival of operations.

It has also asked the low-cost carrier to submit the status of the availability of the operational aircraft fleet, post holders required, pilots and other personnel, maintenance arrangements, funding, working capital, arrangements with lessors and vendors, etc., before starting its operations. Go First suspended its operations on May 3 and flights have been suspended at least till May 26.

Depending on its response to its financial and manpower resources, the aviation regulator will decide whether to allow the low-cost carrier to operate again.

The cash-strapped airline stopped flying from May 3, after it filed for bankruptcy citing that it has plunged into a financial crisis after it had to ground about half of its fleet due to "faulty" Pratt & Whitney engines.

On Wednesday, Go First submitted its response to the DGCA showcause notice, which was issued on May 8. The low-cost carrier requested DGCA to allow it to use the moratorium period to prepare a comprehensive restructuring plan for restarting operations and present the same to DGCA for the requisite regulatory approvals.

Following which, DGCA asked the cash-strapped airline to submit a comprehensive restructuring/revival plan for a sustainable revival of operations within a period of 30 days. The revival plan once submitted will be reviewed by DGCA for further appropriate action.

Earlier, DGCA said it will conduct an audit of Go First’s preparedness before approving the resumption of flight operations from the crisis-hit carrier.

On May 24, civil aviation minister Jyotiraditya Scindia too said that his department has not heard from the low-cost carrier (LCC) about its revival plan.

“We have not received anything [concrete] from Go First so far. We will be taking a final decision on permissions to the airline after examining all safety protocols,” the minister said on the sidelines of the industry chamber CII’s annual session Wednesday.

The low-cost airline is currently under the aegis of an interim resolution professional (IRP), Abhilash Lal, who was appointed by the National Company Law Tribunal (NCLT) on May 10.

Fight with lessors

On Monday, the apex body the National Company Law Appellate Tribunal (NCLAT) had upheld insolvency proceedings against Go First, derailing the airline's lessors, who have been trying to take back their planes.

At least three leasing companies, including SMBC Aviation Capital, had challenged the NCLT ruling granting Go First bankruptcy protection earlier this month.

On Wednesday, NCLAT directed three aircraft lessors of Go First to approach NCLT over their claims for possession of aircraft.
   
The appellate tribunal directed Accipiter Investments Aircraft 2, Eos Aviation 12 (Ireland) and ACG Aircraft Leasing Ireland to go to NCLT over the applicability of the moratorium on their aircraft.

"The facts and submissions raised in these appeals are same as has been considered and decided by our judgment and order dated May 22, 2023, hence these also deserve to be decided in the same terms," NCLAT said in its order.

On Wednesday, Go First's suspended board filed caveats in the Supreme Court against four aircraft leasing companies, which are seeking to deregister their aircraft from its fleet in order to repossess them.

The caveats will help the board to get clarity before the lessors initiate legal action against it, and are in relation to cases involving Go First chairman Varun Berry and lessors SMBC Aviation, GY Aviation, Engine Leasing Finance, and SFV Aircraft Holdings.

The NCLAT's Monday order will likely help the airline resume operations as an adverse order would have allowed the lessors to take back their planes, which would have further impacted Go Air’s plan to resume operations.

Also read: Go First crisis: Fallout from the bankruptcy can be contagious for India's aviation sector

Also read: Go First crisis: Uncertainty persists as Scindia, DGCA deny receiving any firm proposal on resumption of flights

Also read: Amid ongoing litigation with Go First, P&W opens up on all contours of 'faulty engines’ claim

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