Summary
- Go First may receive more money than initially planned, allowing it to restart operations with a smaller fleet of 10-15 aircraft.
- The airline owes over ₹65 billion to financial and operational creditors and can also be working on a refund plan for its customers.
- Test flights have already begun as a part of the flight resumption process, and Go First is reportedly in talks with airports to regain its slots.
India’s grounded low-cost airline Go First could find yourself getting more money than planned and restart operations with a limited fleet. The airline has been conducting test flights recently, suggesting that the flight resumption process is underway. Still, it stares at a difficult road ahead, with multiple issues, including that of ticket refunds.
Extra cash sought
Go First could restart operations with a funding of around ₹6-7 billion ($72-84 million), based on a report by Mint. That is greater than the initial interim funding of ₹4-5 billion ($48-60 million) that was sought.
However the revision in funding also comes with a modification within the flight resumption plan. Earlier, Go First was alleged to restart flights with a fleet of around 26 airplanes. But with more funding, it would start at a smaller scale with around 10-15 aircraft.
Photo: Soos Jozsef | Shutterstock
Sources have told Mint that it’s believed that the easiest way forward for Go First is to have more “money in hand” with a smaller fleet to make sure stable operations. This can enable the airline to have higher infrastructure and enough to compensate its employees within the near future.
Go First owes greater than ₹65 billion ($787 million) to financial creditors, similar to the Central Bank of India Ltd, IDBI Bank Ltd, and Axis Bank Ltd, amongst others. It has also been unable to maintain its payment commitments to operational creditors, including aircraft lessors.
Ticket refund plan
Go First also faces the daunting task of issuing refunds to customers. The National Company Law Tribunal (NCLT) has asked for the consent of Insolvency and Bankruptcy Board of India (IBBI) and the Committee of Creditors (CoC) on the airline’s roadmap for issuing ticket refunds.
Go First’s Resolution Skilled (RP) has said that the carrier will repay through credit issued to passengers and travel agents in addition to payment once ticket sales start and revenue is generated through flights. Meanwhile, the airline has updated its website, stating that flight operations remain suspended until August third.
Photo: Soos Jozsef | Shutterstock
The NCLT, nonetheless, has sided with Go First and rejected its lessors’ request to refrain the airline from using the leased aircraft. Go First has been at loggerheads with its lessors, who’re dissatisfied with the treatment given to their rights during this whole process.
Flight resumption process underway
At the same time as it sorts out its funding, Go Fist has began with test flights within the run-up to its planned business resumption. The test flight is one among the mandatory requirements during which airlines must prove that their aircraft are ready for operations. Last week was the primary time Go First flew its Airbus A320 aircraft since halting operations in May.
Photo: John1107 | Shutterstock
Go First is reportedly also in conversation with airports handy over its slots. The carrier’s slots got to other airlines on an ad-hoc basis, however the airline has reportedly asked for its slots to now be restored.
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