Go First Seeks Up to Rs 600 Crore in Additional Funding, According to Report

Go First, the cash-strapped airline is seeking additional funding of up to Rs 600 crore ($122 million), according to a report by Reuters, which cited banking sources. At a lender’s meeting held on Wednesday, the airline presented its request for funds, with lenders expected to review the proposals within the next 48 hours.

As per the Reuters report, Go First aims to resume its operations in July, planning to run 78 daily flights utilizing 22 aircraft. However, the airline would require approval from India’s aviation regulator, the Directorate General of Civil Aviation, to proceed with its plans.

The resumption of operations hinges on several factors, including regulatory clearances, as stated by a banker familiar with the matter. Go First had previously canceled all flights until June 25, attributing the decision to operational issues.

The airline has also filed an application for immediate resolution and revival of operations, expressing its intent to resume bookings shortly.

Go First’s Financial Situation

Go First’s financial situation has been severely impacted by the grounding of more than half of its fleet due to recurring technical problems and a lack of engine supply from Pratt & Whitney. Before its case was taken to the National Company Law Tribunal (NCLT), the airline had been actively seeking a strategic investor. While operational, the airline operated on a cash-and-carry basis, requiring daily payments for the desired number of flights.

Industry officials revealed that as of March 31, Go First had 30 aircraft grounded, including nine on which lease payments were due. The airline’s fleet consists of a total of 61 aircraft, comprising 56 A320neos and five A320ceos, as mentioned on its website.

Since July 2022, when the grounding of its aircraft initially occurred, Go First’s market share has significantly diminished. In February, its market share contracted to 8 percent, carrying 963,000 passengers, compared to its peak of 11.1 percent when it transported 1.27 million passengers in May 2022.

The decline in passenger numbers has had a negative impact on Go First’s financial performance. Regulatory filings indicate that the airline recorded a net loss of $218 million in FY22, doubling the previous year’s loss of $105 million.

The bankruptcy filing of Go First includes outstanding debts to various creditors, including the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, totaling Rs 6521 crore.

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