DGCA approves GoFirst’s revival plan; airline awaits interim funding from lenders

The Directorate General of Civil Aviation (DGCA) has approved GoFirst’s revival plan subject to fulfilment of certain conditions. The next step now for the Wadia-owned airline is to secure interim funding from the lenders. The airline, which floated its Expression of Interest (EoI) documents, has received 40 early queries, sources said. It has also received unverified claims to the tune of ₹24,000 crore.

The DGCA said the revival plan submitted by Shailendra Ajmera for operating 15 aircraft and 114 daily flights has been reviewed and “accepted”. However, it is subject to the outcome of the writ petitions and applications pending before the High Court of Delhi and NCLT.

The civil aviation regulator said that GoFirst would have to adhere to relevant regulatory requirements for the Air Operator Certificate. The airline should ensure airworthiness of its aircraft engaged in operations and conduct a satisfactory handling flight before deploying any aircraft. The regulator further said that the RP is responsible for submitting a proposed flight schedule, considering available resources, among other conditions.

Charter flight operations

A senior DGCA official said the airline, however, doesn’t need permission to restart charter flight operations. “As soon as they get the funding from the lenders, they could restart operations, however, a proving flight would be mandatory,” the person said.

Kaushik Khona, the CEO of the airline, told his employees, “ The last hurdle to arrange the interim finance is still pending, but with the DGCA approval I am sure that the hurdle will be overcome very soon.”

Meanwhile, a meeting of the Committee of Creditors was held.

During the meeting, the RP informed the lenders that the airline had so far received 40 early inquiries for the Expression of Interest floated on July 9 but no formal queries. The last date to submit an EoI is August 9.

The airline, which had dues to the tune of ₹11,000 crore, as of April 28, also has to tabulate the claims from operational and financial creditors. Banking sources told this paper that so far, it has received claims to the tune of ₹24,000 crore. The lessors have submitted claims to the tune of ₹18,000 crore and the lenders have further claims of over ₹5,000 crore. The RP is yet to verify these claims.

The airline has sought interim funding of ₹650 crore, including ₹200 crore as back-up funding. It is also in conversation with PE funds. However, top sources told businessline that it is aiming to seek funds from the existing lenders owing to the high interest rate of over 20 percent charged by PE funds. Multiple people said all eyes were on the interim funding from lenders, after which the airline could restart operations. The salary for July depends on the interim funding, sources said.