DGCA gives nod to Go First flight resumption plan, but with riders

The acceptance of the resumption plan by the DGCA takes the cash-strapped airline a step closer to restarting operations.

In a surprise announcement on May 2, the Wadia group airline said that it was voluntarily filing for insolvency with the NCLT, blaming US-based engine manufacturer Pratt & Whitney (P&W) for its financial situation. Go First has not operated any commercial flight since May 3.

“RP shall submit the proposed flight schedule, commensurate with the available resources in terms of airworthy aircraft, qualified pilots, cabin crew, AMEs (aircraft maintenance engineers), flight dispatchers, etc, for consideration of DGCA after making requisite arrangements for commencement of scheduled flight operations, including the interim funding required for resumption of operations,” the DGCA said, adding that the airline can resume flight operations only once the DGCA approves the flight schedule.

Other conditions listed by the regulator include ensuring compliance with all applicable regulatory requirements, continued airworthiness of the aircraft to be used for operations, and subjecting every plane to a “satisfactory handling flight” before deploying it for flight operations.

On June 28, Ajmera had presented a flight resumption plan to the DGCA, following an interim funding approval by Go First’s lenders. The Committee of Creditors (CoC) of the embattled airline had given an in-principle approval to an interim funding of Rs 450 crore. Go First’s CoC includes Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank.

As per that initial resumption proposal, Go First planned to restart operations with a fleet of 26 aircraft, with four planes on standby, and operate around 160 daily flights.

The DGCA then conducted a special audit of Go First facilities in Delhi and Mumbai from July 4 to 6. Following the audit, the DGCA made a number of observations and inferred that the airline does not have adequate operational staff to operate the proposed number of flights. Based on the DGCA’s observations, the airline dialled down flight resumption plan to 15 aircraft and 114 daily flights.

In its filing with the NCLT, the beleaguered airline said that it owed a little over Rs 6,500 crore to financial creditors. The airline’s total liabilities to all creditors stood at Rs 11,463 crore, including dues to banks, financial institutions, vendors, and aircraft lessors.

While Go First’s aircraft lessors had applied to the DGCA to repossess their planes from the embattled airline in May, the admission of Go First’s insolvency plea by the NCLT resulted in a moratorium coming into play, prohibiting recovery of any asset in possession of the corporate debtor by the owner of the asset, aircraft in this case. Had the lessors been able to take back their planes, hopes of Go First’s revival would have been extinguished.

Apart from the NCLT, the lessors also moved the Delhi High Court, which is hearing their petitions. Meanwhile, the corporate insolvency resolution process is proceeding at the NCLT.