MUMBAI : Go Airlines (India) Ltd, the low-fare carrier that filed for bankruptcy last month, secured lenders’ approval for interim funding of ₹450 crore, potentially paving the way for the grounded airline to resume operations.
While an in-principle approval for interim funds has been granted, the plan is subject to approval from the respective boards of the banks, said one of the people cited above.
The decision was taken at a joint lenders’ meeting on Saturday. Central Bank of India, Bank of Baroda, and IDBI Bank are part of the lenders’ consortium of Go First.
A senior Go First executive said it might only need ₹200-250 crore to resume operation. “The airline may not require the full amount as it will start generating cash after starting operations,” he said.
Queries to the resolution professional Shailendra Ajmera didn’t elicit a response till press time.
Mint first reported on 13 June that EY India had recommended the lenders for interim financing to revive the airline’s operations. The funding will help Go First restart operations next month.
In its latest plan submitted to the Directorate General of Civil Aviation (DGCA), the airline said it could start with 22 aircraft and 150 daily flights.
Though the airline has 27 aircraft, it seeks to keep four-five in reserve. “The plan is to be prepared for technical issues in the initial days and to earn the trust of flyers…the airline does not want on-time performance issues… it wants to be prepared for technical issues,” the official said.
To be sure, bankers have analysed Go Air’s readiness to fly again and feel that since it retained 50-60% of pilots and a majority of ground staff, it will soon be able to resume services. Go First’s turnaround is, however, dependent on the approval by the aviation regulator and Pratt & Whitney’s initiatives to service engines of its grounded fleet, he said.
According to DGCA’s data for April, Go First had a 6.4% share in the domestic market and carried 829,000 passengers. The airline will need to rebuild trust among passengers and the aviation community to tide over the crisis. Go First filed for insolvency on 2 May, and the National Company Law Tribunal admitted the proposal on 10 May. The airline has a moratorium on all payments for six months.
Go First’s creditors replaced the previously appointed interim resolution professional (IRP), process adviser, and legal agency after the lead lenders visited the airline’s office earlier this month.
The lenders replaced Alvarez and Marsal’s (A&M) Abhilash Lal with EY’s Ajmera as the resolution professional.
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Updated: 26 Jun 2023, 12:29 AM IST