2023-05-23 15:04:52
GoFirst has responded to the show cause notice it received and expressed its intention to resume operations as soon as possible, according to sources at the DGCA. The airline has assured the regulatory body of its commitment to restarting services; however, no specific timeline has been provided at this stage.
Additionally, GoFirst has communicated with its pilots through a letter, informing them that their salaries for April will be disbursed prior to the commencement of operations. Furthermore, the airline has promised that going forward, salaries will be paid within the first week of each month.
On May 8, the DGCA issued a show cause notice to GoFirst due to the suspension of operations. Sources within the DGCA have confirmed that GoFirst responded within the given 15-day timeline. An anonymous official stated, “The airline has expressed intent on the resumption of operations. They have said that they are confident of resuming the airline’s operations at the earliest.”
Timneline unclear
While the airline has broadly indicated the contours of its restructuring plan, there is currently no definitive timeline for resuming operations. It is unlikely that the airline will resume operations on May 27, as previously communicated, the official added.
GoFirst had earlier mentioned in an email to its pilots that it intended to restart operations on May 27. However, on May 2, the airline filed for voluntary insolvency, and its application was admitted by the NCLT on May 10, resulting in the implementation of a moratorium. This moratorium prevents lessors, lenders, and vendors from seeking immediate repayment of dues.
The airline’s total liabilities to all creditors amount to ₹11,463 crore, which includes dues to banks, financial institutions, vendors, and aircraft lessors. Financial institutions are owed ₹6,521 crore, and the company has defaulted on payments to operational creditors, including ₹1,202 crore to vendors and ₹2,660 crore to aircraft lessors.
Salary assurance
In an email reviewed by businesslineRajit Ranjan, the airline’s VP for Flight Operations, informed employees that the DGCA would be conducting an audit to assess their preparedness. Once approved by the regulator, operations can be expected to commence.
Also read: Go First insolvency: Making promoter’s bid count
The VP of Flight Operations assured employees, “The CEO has assured that the salary for the month of April will be credited to your account before the commencement of operations. Furthermore, from the coming month, the salary will be paid in the 1st week of every month.”
The airline has over 7,000 employees on its payroll. Meanwhile, aircraft lessor BOC has filed an application with the NCLT.
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