Flight operations can take off with 152 daily flights: Go First to DGCA

Go First has apprised the Directorate General of Civil Aviation (DGCA) of being able to operate 152 daily flights as soon as its resumption plan hits the tarmac, company executives informed Business Standard on Monday.

Currently under the administration of insolvency resolution professional Abhilash Lal, the airline has been inoperational since May 3. Before the cash-strapped airline went under, it used to operate 200 daily flights (until April).

In a resumption plan submitted to the DGCA earlier this month, the airline said it has the “requisite” number of employees — approximately 675 pilots and 1,300 cabin crew members — to operate the 26 operational planes in its fleet.

“We have told the DGCA that these 152 daily flights will be operated using 22 active planes. The remainder four will stay on the ground as spare aircraft to be used to ensure schedule consistency in case one of the 22 planes is grounded due to technical issues,” said one of the executives.

With spot airfares soaring in India, especially on routes where Go First had sizeable presence, the Ministry of Civil Aviation has been hoping that Go First can resume flights, said a senior government official.

“That is the only viable route to bring down airfares,” said the official.

Go First executives said that all 200 vendors — including Indian Oil Corporation, Airports Authority of India, private airport operators, internet provider companies, ground-handling agents, and food providers — have signed up for the airline’s resumption plan.

However, 82-85 per cent of the vendors now want to deal with the airline in cash-and-carry mode, under which the carrier pays money in advance for each day’s services.

The airline’s executives said they have requested the lenders to grant them Rs 208 crore under the Emergency Credit Line Guarantee Scheme (ECLGS) so that the airline can resume flights. This amount was sanctioned a few days before the airline went belly up.

“The committee of creditors will hold its first meeting on June 9. It is expected that the lenders will decide on our request soon,” said the executive.

The airline needs Rs 150-175 crore as working capital and contingencies to resume its services.

“The airline is also in touch with banks to get loans outside ECLGS. It has reached out to three private equity firms to get funds,” said the executive.

On May 10, the National Company Law Tribunal (NCLT) admitted the airline’s voluntary insolvency resolution petition and barred aircraft lessors from taking their planes back. The lessors then went to the appellate tribunal, which did not give them any relief and asked them to go back to NCLT.

While a few lessors went back to the NCLT, others moved Delhi High Court (HC) to deregister the planes.

On Monday, the NCLT told Lal to submit his reply to the application moved by lessors. On June 1, the Delhi HC reserved its order on this matter.

Go First executives said that the lessors terminated the leases for their planes after the airline submitted its insolvency application. Since the NCLT has placed a moratorium on all its assets, the airline will be using the 26 active planes to get back on its feet, they added.

The airline will not be using these aircraft gratis and has already allocated a certain sum towards lease rent payments in the resumption plan submitted to the DGCA, said executives. It is not clear how these payments will be done to lessors because they have terminated the leases.

“Some discussion with lessors will happen after resumption,” said an executive.

The airline’s airport slots are also protected under NCLT order and therefore, the carrier is confident of operating 152 daily flights from Day One, they said.

The spot airfares on five of India’s six busiest routes have jumped threefold in the past month. However, for tickets purchased 30 days in advance on these routes, the fares have seen a marginal increase (not over 15 per cent).

On the Delhi-Mumbai route, which is India’s busiest air route, the average spot airfare on June 1 stood at Rs 18,654, according to data provided by ixigo. On May 1, two days before Go First’s exit, the average spot airfare on this route was at Rs 6,125.

Go First’s resumption plan

• Airline has 26 operational aircraft: 22 will be used to operate flights, four are spare
• It has the requisite employee strength to operate 152 daily flights
• All 200 vendors have signed up for a resumption plan but 85% want to be in cash-and-carry mode
• Carrier in touch with banks and private equity firms to get funds for resumption