India’s aviation regulator has asked Go First to sign new lease contracts with lessors before sending in its flight schedule for approval, people aware of the matter told Moneycontrol.
"The Directorate General of Civil Aviation has asked Go First to submit the necessary documentation for new lease agreements signed with lessors after many lessors informed the DGCA that they have terminated the old agreements," a senior government official said.
The DGCA told the airline that its flight schedule will be approved only after the new lease agreements are signed, the official said.
Another senior government official said the DGCA is likely to wait for the Delhi High Court's decision on an plea by the airline’s lenders to be included in the case filed by lessors to de-register their aircraft. An order is expected on August 3.
Emails sent to Go First and the DGCA were unanswered at the time of publishing.
Go First is preparing to resume operations after halting services in May and seeking voluntary insolvency. The airline owned by the Wadi Group had 56 aircraft on lease. Before filing for bankruptcy, it operated 35 aircraft, while about 30 were grounded due to faulty Pratt & Whitney engines.
Also Read: Aircraft lessors' cooperation imperative for Go First’s revival
Discussions started
While the lessors sought to repossess their aircraft after the airline filed for bankruptcy, Go First is confident they will sign the new agreements rather than let their aircraft lie idle.
An executive close to Go First told Moneycontrol the airline is already discussing new lease agreements with the lessors and with Pratt & Whitney for maintenance, supply of spare parts, and delivery of engines.
"So far, Go First's committee of creditors has had fruitful discussions with both lessors and Pratt & Whitney. All parties are negotiating new leasing contracts, which are expected to be signed soon," the executive said, adding that the airline has also reached out to the management of the Delhi and Mumbai airports to restore its slots ahead of resuming operations.
Another executive close to Go First said the carrier is likely to approach the DGCA for final approval to restart operations in the next 10 days – after getting slot approvals and signing new lease agreements. Once the slots are restored and the new agreements are signed, the airline will begin ticket sales.
Last week, the DGCA accepted debt-laden Go First's resumption plan subject to conditions, including the approval of interim funding by the committee of the airline’s creditors and regulatory clearance of the flight schedule.
Go First plans to resume services with 15-18 aircraft and 130 flights a day and ramp it up to 160 flights per day with 22 aircraft in the subsequent week.
Earlier this week, the National Company Law Tribunal allowed the airline to use the leased aircraft, saying the planes hadn’t been deregistered.
The DGCA conducted a special audit of the airline during July 4-6 to assess safety-related aspects and check compliance with requirements to hold an air operator certificate. The regulator also physically verified arrangements made by the airline to resume flights.
On July 26, Go First operated a successful test flight from Mumbai airport.
Cash-strapped Go First, which had been flying for more than 17 years, stopped operations on May 3 and is now in the midst of an insolvency resolution process. On July 25, Go First said it had cancelled its flights until July 27 due to operational reasons.
Go First resolution professional Shailendra Ajmera has invited expressions of interest from prospective buyers for the airline by August 9. The final list of prospective resolution applicants will be declared on August 19, according to a public notice.
Since May, lessors have sought the deregistration of 54 aircraft of Go First and aviation regulator DGCA is closely monitoring the situation since the airline announced cancellation of flights, the government said on July 24.
In a written reply to Rajya Sabha, Minister of State for Civil Aviation V K Singh said the DGCA has received applications from lessors for deregistration of a total number of 54 aircraft leased to Go First.
Singh said a total number of 358 leased aircraft have been removed from Indian Civil Aircraft registry since January 2018 till date.
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