DGCA to audit GO First next week to see if it can fly again

the Go First stopped selling tickets, and announced it was filing for voluntary bankruptcy, within days of the industry witnessing the highest-ever traffic in a single day in India,

For the first time in Indian aviation, the Directorate General of Civil Aviation (DGCA) will initiate an audit at Go FIRST next week. This comes in the wake of a plan submitted by the resolution professional to get the company airborne again, provided it is backed by the lenders.

The suspension of services by Go FIRST had taken everyone by surprise. There were no signs of financial stress in its day-to-day operations, even as the airline grappled with a lack of aircraft in the peak season in April. Within days of the industry witnessing the highest-ever traffic in a single day in India, the airline stopped selling tickets, and announced it was filing for voluntary bankruptcy, saying it was because engine manufacturer Pratt & Whitney had failed to service or supply engines.

Coming back?

No Indian airline has made a comeback after being grounded for over 24 hours. If the airline gets a go-ahead and the lenders decide to step in with the necessary funding, it could mean that the airline would be allowed to start ticket sales.

Currently, the airline has cancelled all flights till July 06, but the flights beyond that are closed for reservations. If the airline does open reservations, it would do so in what is typically a low season.

Over the last couple of days, the average domestic traffic has gone down from 4.26 lakh daily passengers in the first week of June to 4.13 lakh. The airlines have started deploying about 20 fewer flights a day.

Wary travellers and agents

Also, travellers may be wary of booking tickets on Go FIRST, while travel agents have had their money stuck with the airlines.

The airline could start small and offer deep discounting. Over the years, the one thing that has remained constant in India is passengers’ loyalty to lower fares more than the airline. This may explain why airlines with consistently lower OTPs (on time performance) have higher load factors.

The options

There have been reports of employees, including pilots, joining other airlines. The audit will reveal if operations are feasible. Then would come the question of sustainability and costs.

Even If the airline manages to get airborne again, how the lessors react and whether Pratt & Whitney supplies spares and engines will be key to determining whether it stays aloft or gets grounded again.

The airline could potentially look at options like a one-time settlement with lessors and (expensive) wet-lease agreements.

All of this depends on how the audit goes and how much money the lenders pump-in. A compensation from Pratt & Whitney could also help matters somewhat.