The committee of creditors of Go First have approved an interim funding of around Rs 450 crore for the airline to restart its operations.
Sources said that the approval by the CoC, which was granted last week, is in-principle in nature and the respective banks will now need to get approval from their boards.
The CoC comprises Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank.
Also read: Go First may present CoC approved revival plan to DGCA next week
Go First, which filed for voluntary insolvency on May 3, owes Rs 6,521 crore to its financial creditors, according to its filings with the National Company Law Tribunal. Of this, Rs 1,300 crore 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 stand at Rs 11,463 crore.
The airline’s operations are currently suspended till June 28.
“The CoC has been informed about the contingencies involved with running of the airline as a going concern, including the contingencies regarding availability of engines and of keeping four aircraft in reserve. The CoC has been given estimates on the expected passenger load factor,” sources said.
The Go First revival plan entails deployment of 22 aircraft in operation besides keeping four aircraft in reserve to meet any contingency. The plan is to restart charter and scheduled services by July 1, sources added.
The airline will now submit the final revival plan to the Directorate General of Civil Aviation (DGCA).
In fact, Go First’s resolution professional (RP), Shailendra Ajmera had met the DGCA officials last week and apprised them of the meetings being held by the CoC.
According to the first revival plan submitted by Go First to the DGCA for a six month period, it had said that it had 400 pilots on its rolls.
It has also informed the DGCA that oil marketing companies have offered their support. Before the carrier filed for insolvency, OMCs had put its operation on cash and carry terms, which means it had to clear its dues on a daily basis. It had also said that travel agents have offered their support with regard to ticketing services.
The airline has said that once the DGCA approves its 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.
The carrier has offered retention allowance to its pilots and first officers. Under it, the airline has offered to raise monthly salaries of captains by Rs 100,000 and that of first officers by Rs 50,000 as retention allowance. Currently, the monthly average salary of captains is Rs 530,000. The increased salaries will come into effect from June 1.
The main challenge before the airline, however, is to retain its aircraft as lessors have approached DGCA for deregistration of 45 of them. Though the NCLT and National Company Law Appellate Tribunal have rejected their plea, the lessors have moved the Delhi High Court where the matter is sub-judice.
Go First has 7,000 employees on its rolls and the NCLT has directed it not to retrench any staff.
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.