Thursday, July 06, 2023

Go First may get DGCA nod to fly in next 2 days even as Delhi HC order clouds the air

Go First Airlines, previously known as GoAir, is facing an uncertain future as it undergoes insolvency proceedings. This is despite today’s positive developments on the resolution professional (RP) front.

The RP overseeing the case on Thursday, July 6, informed the National Company Law Tribunal (NCLT) that the Directorate General of Civil Aviation (DGCA) may grant permission for the airline to resume operations within the next two days.

However, a recent order by the Delhi High Court has granted lessors the authority to inspect and maintain the company’s aircraft, presenting a potential challenge. Notably, the court has also imposed a restriction on Go First, prohibiting it from removing any components of the aircraft.

The lessors, who lease planes to the airline, are against the resumption of operations without a valid lease agreement in place. They argue that flying planes without proper leasing arrangements is against the rules.

To sustain the airline's operations, the Committee of Creditors (COC) has agreed to release Rs 415 crore. The RP has already applied to the DGCA for permission to resume operations, and a special committee of experts has been formed by the DGCA to evaluate the safety and feasibility of Go First's fleet.

The committee has inspected the aircraft, and its report is expected within the next two days. If the report is positive, the DGCA may grant permission for Go First to resume operations.

In a positive development, the RP has obtained a new order from an arbitral tribunal for the acquisition of five new engines, which could strengthen the airline's position.

06/07/2023 Ashmit Kumar/Anand Singha/CNBC TV18

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