Go First Creditors Approve 425 Crore Funding for Revival of Low-Cost Airline; DGCA Nod Awaited

Go First has received approval from creditors for additional funding required by the grounded airline to restart operations. Go First temporarily halted flights on May 2, 2023 as the airline wasn’t able to run its operations due to financial troubles. Go First will now need DGCA approval before it can start selling tickets again. The troubled carrier is planning to start flying by July 2, after almost sixty days of no operations. Go First’s resolution professional Shailendra Ajmera had asked for Rs 400 crore additional funding to restart operations. The airline could need up to Rs 600 crore.

Go First plans to restart operations with 78 daily flights. The airline had earlier indicated that it would operate 150 daily flights but the current plan includes less destinations. Go First could soon expand the flight schedule, depending on consumer demand. After Go First stopped operations, domestic flight costs jumped across various routes in India. With higher demand during travel season, other airlines added new schedules to their current destinations to cater to additional demand.

Central Bank of India , Bank of Baroda, IDBI Bank and Deutsche Bank have combined exposure of Rs 6,521 crore to Go First. The low-cost airline filed for bankruptcy protection at the National Company Law Tribunal (NCLT) in May this year.

While other Indian airlines are placing historical orders for new airplanes, Go First has been dealing with bankruptcy. There is strong demand in India and the demand is expected to rise in the coming years. If Go First moves carefully, it could revive and register profits. Aviation business faces troubles due to volatility in aviation fuel and rising staff costs. Only groups with deeper pockets and prudent financial management can deal with volatility in this segment. During COVID-19 pandemic, many European and Middle Eastern airlines had to seek help from governments in order to survive.

Article source: https://airlines.einnews.com/article/641401724/LU8rpYcQus-vsBGC?ref=rss&ecode=vaZAu9rk30b8KC5H

Author: Avio Time

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