The airline’s decision to voluntarily declare insolvency caught its lenders off guard and senior bankers got into a huddle on Wednesday to plan the next course of action. A lender on condition of anonymity said that the meeting was inconclusive and would continue on Thursday.
In its insolvency plea, accessed by Reuters, Go First said it owed its financial creditors Rs 6,521 crore ($798 million). It said it had not defaulted on any of these dues. However, considering the present situation of the airline, defaults to banks would be imminent, it said.
The move to limit possible passenger inconvenience came as lessors initiated steps to secure their planes. At least two US-based lessors have applied to the Directorate General of Civil Aviation (DGCA) to deregister three Airbus A320 aircraft leased to Go First.
The airline was served show-cause notice by the civil aviation regulator for cancelling flights without intimation. Till late evening there was no update from the DGCA on the airline’s response and its regulatory action.
Khona told mediapersons the promoters, the Wadia group, remained committed to the airline, having pumped into it Rs 3,200 crore in the past three years.
Meanwhile, employees are hoping that the airline will fly out of the crisis with government support. Some, however, are already scouting for work. For instance, some Go First pilots have joined airlines in West Asia in recent weeks and others have approached IndiGo and Air India.
The airline has squarely blamed engine maker Pratt & Whitney for forcing it to take the drastic step and accused it of not honouring the arbitral award to supply engines. The order had directed the engine maker to immediately release 10 serviceable spare leased engines by April 27 and 10 such engines every month till December, Go First had said on Tuesday.
The engine maker in turn said Go First had a lengthy history of missing its financial obligations to it.
“Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. P&W is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further,” it said in a statement.
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