DELHI- Today (On Jun 7, 2023), Indian Civil Aviation Minister Jyotiraditya Scindia announced that the Directorate General of Civil Aviation (DGCA) is presently evaluating the flight resumption plan presented by LCC Go First (G8).
Following its voluntary insolvency filing in the National Company Law Tribunal, the Mumbai-based airline ceased its operations on 3rd May. Before the suspension, the low-cost carrier had a market share of approximately 7% in March. Further, it operated over 300 flights daily.
DGCA Assessing Go First Restart Plan
The airline is currently undergoing bankruptcy proceedings. During a recent media interaction, Jyotiraditya Scindia informed reporters that the DGCA has raised some inquiries regarding the flight resumption plan submitted by Go First.
The airline is expected to respond to these queries. Thereupon, the DGCA can provide its approval, and the plan can proceed further.
“The aviation sector in India operates under a deregulated framework. Our role as regulators is to facilitate its growth,” he stated. “While discussing airlines like Go First and Jet Airways, it’s important to acknowledge the success stories of new carriers like Akasa and small regional airlines.
We hope to see more airlines emerge and contribute to the industry,” he further emphasized.
“The current capacity constraints have led to a significant increase in seat load factors. We have advised airlines to review and rationalize their pricing strategies, closely monitoring their fare structures,” added Scindia
“Specifically, 4-5 cities have experienced higher fares. We are closely monitoring the situation. I am pleased to note that there has been a recent decline in spot fares on these routes over the past two days,” mentioned Scindia.
Go First to Restart flights
According to the Economic Times, Abhilash Lal, the resolution professional representing Alvarez and Marsal consulting firm. It has nominated the current CEO, Kaushik Khona, to assume responsibility for overseeing the daily operations. Subsequently, acting as the accountable manager for the airline.
Following its insolvency filing last month, the airline has communicated to the regulator that it requires ₹200 crores to resume flight operations.
It has access to ₹400 crores in funds through the government’s emergency credit line guarantee scheme (ECLGS). Further, they also have unused credit available.
The airline is currently engaged in discussions with lenders to secure interim funding of ₹200 crores. This will be utilized to cover salaries for the months of April and May and fulfil vendor payments.
According to the airline’s business plan, it requires ₹12 crores to sustain daily operations in a cash-and-carry mode. To support this, the airline’s promoter, the Wadia Group, injected ₹250 crores into the company during the final week of April.
To ensure seamless operations, the DGCA has requested guarantees concerning the availability of pilots and cabin crew.
In its response, the airline noted that although it has faced several resignations, it maintains a pool of 340 pilots, 680 cabin crew members, and 530 engineers. This many staff is deemed adequate for the operation of its fleet consisting of 22 aircraft.
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