Struggling with a cash crunch, Go First Airlines has found relief in the form of approximately INR 400 crores of interim funding approved by its lenders. The Committee of Creditors (CoC) including Central Bank of India, Bank of Baroda, Doehce Bank, and IDBI Bank, who are well-acquainted with the matter, approved additional funding on the night of June 24.
Key Highlights
- Go First had approached these banks for operational expenses to resume its operations promptly.
- One of the top officials from the lending banks informed that around INR 400 crores will be provided to the airline to resume its business operations.
- An anonymous source revealed that if needed, the airline might receive additional funding.
The Debt Picture
According to a report, Go First owes a total of INR 6,521 crores to banks. This includes INR 1,987 crores to the Central Bank of India, INR 1,430 crores to Bank of Baroda. Furthermore, Go First is due to pay INR 1,320 crores and INR 58 crores to Doehce Bank and IDBI Bank respectively.
Eyes on DGCA
Following the financial support from banks, the focus now shifts to the aviation regulator, the Directorate General of Civil Aviation (DGCA), which is considering the airline’s application. The airline has requested permission to start flying again. ‘Everyone is now looking at the DGCA, which can decide about approval after inspecting the aircraft and other investigations. We hope that the airline’s flights will start soon,’ said an informed source.
For selling tickets and starting its flights, Go First needs the approval of the aviation regulator. According to sources, the airline could restart its operations on 78 routes with the help of 22 aircraft from July 1.
The Backstory
Go First had announced on May 2 that it had applied to initiate the insolvency process at the National Company Law Tribunal (NCLT), Delhi. The airline’s CEO, Kaushik Khona, had given this information. Earlier, the company had stated that it was canceling flights for May 3 and 4 due to lack of funds. The airline company attributed its financial woes to the supply of faulty Pratt & Whitney engines, due to which many of its planes are not capable of flying.
