The National Company Law Tribunal (NCLT) will pronounce its order on Go First’s insolvency case on Wednesday, according to according to the tribunal’s cause list.
The tribunal will determine the fate of the airline with an order on whether its 20 aircraft be deregistered by the Directorate General of Civil Aviation (DGCA) as demanded by the lessors.
Sources said that if Go First fails to receive any relief on this front, the DGCA will have to take call on the demand of the lessors to deregister the aircraft.
During the hearing last Thursday, while reserving its order on the airline’s plea for an interim moratorium, the NCLT had noted that there was no such provision in the Insolvency and Bankruptcy Code and that only an absolute moratorium was possible.
Go First chief executive officer, Kaushik Khona said on Saturday that the airline was in a position to resume flights within a week if the tribunal restrained lessors from re-possessing the planes. With half of its Airbus A320 Neo fleet grounded, due to engine troubles, the carrier has lost Rs 10,800 crore in revenue. Should the tribunal allow a moratorium, it would keep lessors from reclaiming their planes and creditors from encashing guarantees and letters of credit, Khona said.
The airline also wants the DGCA and AAI to not cancel any departure and parking slots allotted to the company.
Meanwhile, a government bailout of Go First cannot be considered unless the issue of supply of engines with Pratt & Whitney is sorted out, minister of state for civil aviation V K Singh said.
“The problem with Go Air is that their flights are run on engines of Pratt & Whitney, which is facing management issues since Covid-19, so engine manufacturing is not happening at that pace that it should have,” Singh told a news agency. “What can be done about a bailout? Where will P&A get engines?” Singh asked. He said that bailout can happen only when something can be done about the engines.
The DGCA has already directed Go First to halt ticket sales and bookings till further orders. The regulator has issued a show cause notice to Go First for its “failure to continue the operation of the service in a safe, efficient and reliable manner”.
“The airline operator has been asked to submit their reply within 15 days of the receipt of this notice, and further decision on the continuation of their ‘Air Operators Certificate’ (AOC) will be taken on the basis of the reply submitted by them,” the regulator said.
Go First on Tuesday said it will respond to DGCA’s show cause notice in due course and is taking all possible measures to reduce inconvenience to the passengers. “To reduce the inconvenience to the passengers, we had already stopped taking bookings, before the DGCA issued the notice,” the company said.
The airline has cancelled all its flights till May 12 and suspended sale of tickets till May 15.
Last week, aircraft lessors approached DGCA to deregister and export 20 aircraft under the Irrevocable Deregistration and Export Request Authorisation (IDERA) norms. Among these were CDB Aviation, SMBC Aviation Capital and Sonoran Aviation Company. These norms require the regulators to deregister aircraft in cases of lease rental defaults and allow lessors to repossess them within five working days of receiving a request. Following the due process, the DGCA has published applications filed by lessors under the IDERA norms on its website. The Wadia Group-owned airline has liabilities worth around Rs 11,000 crore.