Earlier last month, on May 2nd, Indian low-cost carrier Go First temporarily lived as much as its namesake after publicly announcing its intention to file for voluntary bankruptcy proceedings. Despite holding a big market share within the Indian aviation industry, the airline faced a severe financial crunch and owed money to several lenders.
Given the voluntary insolvency resolution proceedings, Go First has been grounded for just over a month with no real solution available. The continued struggle also forces the airline to increase flight cancelations, with the most recent until June twenty eighth. But fortunately for the airline, there appears to be light on the horizon after its lenders approved interim funding to maintain it afloat.
A possible lifesaver for Go First
Although the airline’s resolution skilled had earlier submitted a marketing strategy and request for over Rs 400 crore ($48.79 million) of interim funding to help within the restart of flight operations to the Committee of Creditors – which comprises of the airline’s various lenders, similar to the Bank of Baroda, and the Central Bank.
There’s also the inclusion of the Deutsche Bank and the IDBI Bank, and collectively, these lenders have a debt of over Rs 6,520 crore ($795.82 million) owed to them from Go First. Nevertheless, the interim funding request was not entirely entertained until June twenty second, when bank representatives met to debate it.
Photo: John1107 | Shutterstock
Bottom line
This whole situation could end in some ways, although the first two could be if the DGCA gives its approval after being satisfied by the clearance review and allows Go First to begin selling tickets and take to the skies.
The opposite might be if the DGCA withholds approval as a consequence of whatever was found lacking, which might likely bring the airline back to square one. Hopefully, the DGCA will resolve with the previous in order that Go First will likely not succumb so soon.