On Monday, the Directorate General of Civil Aviation (DGCA), the Indian aviation watchdog, issued a show cause notice to Go First (G8), an airline owned by the Wadia Group, due to the sudden cancellation of flights and initiation of the corporate insolvency resolution process under IBC.
As part of the notice, the airline has been instructed to cease the sale of tickets until further notice.
DGCA Issues Notice to Go First
The DGCA has issued a show cause notice to Go First, a cash-strapped airline owned by Wadia Group. For abruptly canceling flights and initiating the corporate insolvency resolution process under IBC.
The DGCA has cited the airline’s inability to operate the service safely, efficiently, and reliably as the reason for issuing the notice. Which is based on the relevant provisions of the Aircraft Rules, 1937.
According to a source, PTI reported that Go First has been given 15 days to respond to the notice. Further, based on the airline’s response, a decision regarding the Air Operators Certificate (AOC) will be made.
After the CEO of Go First said in an interview that he is optimistic about resuming flights within seven days. If the bankruptcy court stops lessors from reclaiming their planes, the aviation regulator has issued its ruling.
Kaushik Khona, the CEO of the crisis-hit airline, expressed optimism in an interview on Saturday. Subsequently, saying that they will be able to save the airline if the court begins the insolvency resolution process immediately. Further, He added that all stakeholders, including oil suppliers and service providers, are aware of their cooperation and transparency.
Go First NCLT Hearing
On Monday, Go First appealed to the National Company Law Tribunal to expedite a decision on its voluntary insolvency resolution plea due to lessors starting to deregister the airline’s aircraft.
On May 4, the tribunal reserved its order on the carrier’s petition. Senior advocates P Nagesh and Pranjal Kishore mentioned the matter to the tribunal’s principal bench headed by President Ramalingam Sudhakar.
They urged the tribunal to decide early on the plea since lessors have started deregistering the airline’s planes. Further, The bench agreed to consider Go First’s request.
Over 20 planes have been sought for deregistration by lessors, who have approached the DGCA. After the Wadia Group-owned company filed its voluntary insolvency resolution plea.
Reason for Grounding
Go First, which has been flying for more than 17 years, has suspended the sale of tickets till May 15.
The airline has said the combustor of Pratt engines degraded much faster than it should, causing premature failures and shutdowns. That technical snag forced the airline to remove 140 engines between 2016 and February 2023 out of a total of 510 defective GTF engines that had to be changed and swapped during that period.
Go Air has 16 undelivered Airbus aircraft, Khona said, adding the airline is talking to the European planemaker about the engine issues and has asked it to hold the deliveries of three jets. The airline owes creditors about Rs 3,900 crore, secured by its assets and its owner Wadia Group’s land parcel valued at Rs 3,000 crore.
“We proactively want the airline to survive,” said Khona, who rejoined Go Air in 2020 after heading the airline for three years through 2011. “I have a lot of emotions attached to this airline. Go Air was the baby I nurtured.”
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