Go First Receives Show Cause Notice from DGCA, Ordered to Cease Ticket Sales

Go First, an airline owned by the Wadia Group is facing scrutiny from the Directorate General of Civil Aviation (DGCA), the Indian aviation regulator. On Monday, the DGCA issued a show cause notice to Go First in response to the airline’s abrupt flight cancellations and its decision to initiate the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC). The DGCA has also instructed Go First to suspend the sale of tickets until further notice.

GO FIRST

The DGCA issued a show cause notice to Go First based on the provisions outlined in the Aircraft Rules of 1937. The notice highlights the airline’s failure to maintain a safe, efficient, and reliable operation of its services, considering the sudden cancellations of flights and the decision to pursue corporate insolvency resolution under the IBC.

News agency PTI cited a source requesting the airline to respond to the show cause notice within 15 days of receiving it. The decision regarding the continuation of its Air Operators Certificate (AOC) will be based on the airline’s submitted reply.

The regulatory body’s decision follows an interview in which the CEO of the crisis-hit airline expressed optimism about resuming flights within seven days. He mentioned that if the bankruptcy court does not restrain lessors from reclaiming the aircraft, it would positively impact the airline’s future prospects.

CEO Kaushik Khona stated, “If the court initiates the insolvency resolution process immediately, we are confident that we can fully revive the airline.” He further emphasized that the airline has maintained a cooperative and transparent relationship with all stakeholders, including oil suppliers and service providers.

During a hearing on May 4, Go First, a budget airline, requested an early decision on its plea for voluntary insolvency resolution from the National Company Law Tribunal. The airline cited that its lessors have already started deregistering its planes. The tribunal had reserved its order on the airline’s petition, but Senior advocates P Nagesh and Pranjal Kishore, representing Go First, urged the tribunal to expedite the decision-making process. President Ramalingam Sudhakar headed the principal bench of the tribunal, and the counsels approached him in the morning. The tribunal agreed to consider Go First’s request.

Wadia Group Firm

Following the Wadia group firm’s plea for voluntary insolvency resolution, lessors have requested the deregistration of over 20 planes and have approached the DGCA.

Go First, a flight carrier with a history spanning over 17 years, has temporarily halted ticket sales until May 15.

According to Go Air, the Pratt engines’ combustor deteriorated at a significantly faster rate than anticipated, leading to premature malfunctions and shutdowns. As a result, the airline had to replace 140 engines between 2016 and February 2023 out of a total of 510 faulty GTF engines that required replacement during that timeframe.

Khona, a representative of Go Air, revealed that the airline currently has 16 Airbus aircraft awaiting delivery. In light of the engine issues, Go Air has engaged in discussions with the European aircraft manufacturer and requested a postponement of deliveries for three of the jets. The airline’s outstanding debts, totaling approximately Rs 3,900 crore, are secured by its own assets as well as a land parcel owned by the Wadia Group, valued at Rs 3,000 crore.

Khona, who returned to Go Air in 2020 after serving as the airline’s head for three years until 2011, expressed his strong desire for the airline’s survival, stating, “We are taking proactive measures to ensure the airline’s sustainability. I have a deep emotional connection to this airline, as Go Air was like my own child that I nurtured.”

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