Creditors of Go First (Mumbai International) have approved in principle finance of INR4.25 billion rupees (USD51.8 million) to relaunch the airline, according to India's Mint outlet. However, the financial lifeline remains subject to approval from the lending banks.
Go First secured the in-principle approval at a creditors' committee meeting last week. The Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank attended. The carrier owes the four financial institutions substantial amounts. Those banks will now take the proposal to their boards for approval. If and when that occurs, India's Directorate General of Civil Aviation (DGCA) will need to sign off on any restart of operations. Go First suspended flights on May 3, owing creditors over USD1.25 billion. The amount owed to banks accounts for approximately 60% of that..
Roughly half of the USD51.8 million is available to the airline via India's Emergency Credit Line Guarantee Scheme (ECLGS). However, as recently reported by ch-aviation, those funds are provided by banks after the National Credit Guarantee Trustee Company guarantees the loan. In Go First's case, it was uncertain that the trustee company would do that. There was also the possibility that lenders would request a forensic financial audit to determine the airline's true financial position when it filed for voluntary administration.
Go First's flights are currently cancelled to June 28. The airline has advised they can have two aircraft in the air within 48 hours of DGCA approval and reactivate aircraft at a steady clip after that. Early restart plans, since refined by the incumbent resolution professional, Shailendra Ajmera, project a relaunch using around two dozen aircraft, which would fly around 150 flights daily when fully operational.
