Let's get business running, crisis-hit Go First's IRP tells staff

Go First Chief Executive Officer Kaushik Khona and tribunal-appointed interim resolution professional Abhilash Lal on Thursday reached out to the airline’s staff, seeking their support for revival.

While Khona said the company had taken all steps for the airline’s revival, Lal put forward the view it would have to raise funds. Employee engagement took place a day after the National Company Law Tribunal (NCLT) admitted the airline’s insolvency plea on Wednesday and ordered a moratorium on recoveries.

“We have to get business back running and have to raise funds and make sure we have qualified people running it and above all we have to ensure we continue doing the good work to the highest level of excellence that we have done so far,” Lal said in a virtual town hall with the airline staff.

The airline has indicated to the civil aviation ministry it would be able to start operations in around two weeks. Before it suspended flights it was operating around 200 flights daily with 27 aircraft.

The airline will have to plan its operations based on the deposits available and the expected cash flow. It will have to retain pilots, the cabin crew, and engineers who have been offered jobs by rivals. While pilots have to give six months’ notice before leaving jobs, Air India has offered to accept them without a release letter from previous employers. Such pilots though will have to give a self-declaration and indemnify Air India from issues arising from previous employment.

“I am proud of the team and am sure having come thus far, you will continue to be part of the process to bring Go First back to being the most enviable airline shortly,” Khona wrote in a staff email.  

“We seek your continued support to the company in this process of revival,” Khona added.

According to insolvency resolution professional Alok Kumar Agarwal, the airline can seek interim financing from banks, non-banking financial institutions, or third parties to bridge any shortfall and keep operations on during insolvency.

Interim finance is a form of debt and is included in the corporate insolvency resolution process cost. As such it has priority over all other loans in a resolution plan.

Meanwhile, SMBC Aviation Capital, which is one of the lessors of Go First, told the National Company Law Appellate Tribunal (NCLAT) on Thursday the airline filed the insolvency petition to prevent repossession of their aircraft.

With the declaration of a moratorium, lessors are unable to recover their aircraft.

Senior advocate Arun Kathpalia, appearing for SMBC, said lessors had terminated the leases of the aircraft before the insolvency application was admitted by the NCLT.

“They can’t retain my aircraft. We request a status quo on the assets,” he said.

The NCLAT said it would hear the matter at length on Friday.

SMBC Aviation Capital told the NCLAT in a submission the aviation sector in India was being seen as a risky business in the light of what happened to Kingfisher and Jet Airways.

“Due to such difficulties, lessors and international aircraft owners see India as a risky jurisdiction for aircraft leasing. Therefore, Indian operators have to pay a premium to take aircraft on lease. Thus, the admission of the petition (of Go First) will further shake the confidence of the International Aviation Industry,” SMBC told the tribunal in a filing, which was seen by Business Standard.