The Directorate General of Civil Aviation (DGCA) has asked the interim resolution professional (IRP) of Go First to submit the airline’s services resumption plan after receiving the approval from the committee of creditors (CoC). Only when the CoC approves the plan for restarting the services, the aviation regulator will examine it, sources said.

The CoC is likely to hold its first meeting on Friday. Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank are the main lenders to the airline, which owes Rs 6,521 crore to its financial creditors, according to its filings with the National Company Law Tribunal. Of this, Rs 1,300 has been drawn under the government’s emergency credit line guarantee scheme (ECLGS). Upon including the dues of the vendors, the total dues of the airline stands at Rs 11,463 crore.

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As first reported by FE, the IRP submitted a six month revival plan to the DGCA, around a week ago, stating that the airline is ready to resume operations with 26 operational aircraft in its fleet and 400 pilots on its rolls. It said that once the DGCA approves the revival plan, it can start chartered flights between Delhi-Srinagar and Delhi-Leh immediately by deploying two aircraft. Within the next few days it will be able to resume scheduled services, mainly on the Pune, Bagdogra and Goa routes. The airline has said that it will be able to deploy 8-10 aircraft for the scheduled services.

Apart from seeking several queries relating to its financial viability to restart operations, the DGCA has also sought the nod of the CoC.

In cases where banks file an insolvency case against a firm in the NCLT, the IRP invites bids for a resolution plan. The bids are placed before the CoC, which after voting by the financial creditors, approves the plan which they find offers the best value. This is then presented before the NCLT for final approval. However, the case of Go First is different. Here, the company filed for voluntary insolvency and since it had not defaulted on payment to the financial creditors till then, it’s eligible to submit its own resolution plan.

Legal experts and analysts tracking insolvency matters told FE that in the absence of any legal precedence in such voluntary insolvency cases, the DGCA wants the CoC to approve the plan before it can take a call on it. Analysts said that it remains to be seen whether the CoC invites more bids or approves the plan submitted by the IRP. Alternatively, the CoC may approve the current plan submitted by IRP for an interim period with some conditions attached. “This maybe done so that the airline’s operations do not remain suspended for a long time.

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The airline suspended its operations from May 3, which has now been extended till June 12.

Legal observers said that both the DGCA and the CoC are likely to initially accord an interim or conditional approval to any plan as matters relating to repossession of aircraft by the lessors is pending before the NCLT and the Delhi high court. “The DGCA and the CoC would like to wait for a judicial order, which shows the way forward in such cases,” a lawyer told FE.

The main challenge before the airline is to retain its aircraft as lessors have approached DGCA for deregistration of 45 of them. Go First has committed a default of Rs 2,660 crore toward aircraft lessors and Rs 1,202 crore towards its vendors. The airline has a total fleet strength of 54. Of this, 28 aircraft are grounded due to engine issues with Pratt & Whitney, and 26 are operational.