According to two bankers who are familiar with the matter, lenders of Go First (India) Ltd are expected to meet on Wednesday to deliberate on the next steps to be taken following the airline’s filing for bankruptcy on Tuesday.
According to documents seen by Reuters, the financially troubled airline has revealed that it owes 65.21 billion Indian rupees to its financial creditors. However, as of April 30, the airline had not yet defaulted on any of these payments.
Go First Temporary Shutdown
According to sources familiar with the matter, Go First, a budget airline, has temporarily halted its flights for the next two days due to fleet problems and financial constraints.
An individual familiar with the situation has reported that the airline, which the Wadia group supports, has submitted an application for insolvency before the National Company Law Tribunal (NCLT). Further, the future direction of the carrier is expected to be determined by NCLT and resolution professionals, as per the same source.
“The airline has no inventory of tickets for the next two days, so new bookings cannot be made on ticket booking platforms,” one of the sources familiar with the matter explained.
DGCA Notice to Go First
According to the aviation regulator, “Go First did not provide written notification of the cancellations or reasons for them. By failing to comply with the approved schedule, Go First has caused passenger inconvenience. Further, violated the provisions of CAR, Section 3, Series M, Part IV,” the statement said.
The Directorate General of Civil Aviation (DGCA) has asked Go First Airlines to respond within 24 hours to the show-cause notice that it issued.
Further, the notice demands an explanation for the violation of not providing prior intimation of flight cancellations to the aviation regulator.
Go First Airlines has been directed to give reasons as to why no suitable action shall be taken against them for non-compliance with the approved schedule.
The show-cause notice also stated that the airline’s response must be provided within 24 hours from the date and time of the notice issuance, or else the matter would be processed ex-parte.
Go First Airlines has informed the Directorate General of Civil Aviation (DGCA) that it will cancel all flights on May 3 and May 4 due to the non-supply of engines by US-based Jet engine manufacturer Pratt and Whitney (P&W).
A statement released by the airline stated, “Go First is facing financial crunch due to non-supply of engines by US-based jet engines manufacturer Pratt and Whitney (P&W) that has forced grounding more than 50 planes,” according to a Go First official.
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