Nusli Wadia-owned Go First to receive Rs 600 crore more by April end

This is in addition to Rs 3,000 crore already invested by promoters in the past 20 months

Nusli Wadia-owned Go First will receive Rs 600 crore more as promoter equity and bank debt by April end. This will help it meet immediate capital requirements, a top official of the airline said. The Wadia family and banks would provide Rs 300 crore each.

The Indian aviation sector, which was hit hard by the outbreak of the Covid-19 pandemic and Russia-Ukraine war, has seen a rebound since last October, with domestic traffic crossing 450,000 almost daily.

At present, 23 aircraft out of the airline’s fleet of 57 are grounded because of troubles with engines, supplied by American engine maker Pratt and Whitney. The airline is working on a war footing to bring all the aircraft back into service, the official said.

“The promoters are completely committed to the airline. In the last 20 months, the promoters have invested Rs 3,000 crore and will provide another Rs 290-300 crore as equity by the end of April. An additional Rs 300 crore will come in the form of bank debt under the Emergency Credit Line Guarantee Scheme (ECLGS) scheme of the Indian government by April or May,” said the official, asking not to be named.

In 2021, Go First had announced an initial public offering (IPO) to dilute the promoters’ stake by 25 per cent, but the plan was put on the back burner on the advice of merchant bankers as potential investors sought clarity on the grounded aircraft.

The Wadias have also been approached by several investors for a stake sale as they want to participate in India’s growth story.

“The company has been examining various opportunities, both globally and domestically, and would welcome partnerships that are beneficial to the business operations and all stakeholders,” the official said.

For the past few days, the airline has been operating with 23 planes, but the management hopes the number of operational planes will rise to 28 by the weekend.

The airline expects the majority of its planes to be in service with the overhaul of engines by P&W. Besides, discussions have been held between the airline and the engine manufacturer for compensation of loss caused by the grounding of planes.

“The company, as in the case of other airlines, is engaged with P&W for the loss caused by the grounding of the aircraft,” the official said.

“We received 17 engines from P&W in December. Twenty engines are currently under maintenance, repair, and overhaul (MRO). It is also expected that P&W will be taking more engines into MRO for maintenance,” the official said.

At the moment, the priority, however, is on getting the aircraft back into service, the official said. “We received 17 engines from Pratt & Whitney in December. Twenty engines are currently being overhauled in MRO units and will be made available to us by April-May. Pratt & Whitney will pick up another 44 engines from us for induction in their MROs for maintenance,” the official said.

For now, the airline is operating one extra flight with serviceable aircraft to mitigate the impact of the grounding. “Our aircraft are currently operating 14.5 hours a day, which is the highest in the industry and leads to one extra flight. We are in discussions with lessors and vendors and have received support from them to help manage our cash flows,” the official said.

Of the 720 aircraft currently registered in India, around 120 are grounded, impacting the entire industry, the official said. Daily domestic passenger numbers have been higher than the pre-Covid levels despite the grounding of airplanes.