Go First must have to ink new lease pacts to resume flight operations

The cash-strapped airline has stopped flying from May 3 and is yet to pay some senior level executives.

Crisis-hit Go First’s plans for a quick return to Indian skies are facing headwinds because the Wadia Group-owned airline must ink fresh lease pacts for 30-35 aircraft as lessors have already terminated the previous ones following its insolvency filing, a report has said.

“While the airline is making active efforts to relaunch flight operations, it will need to re-enter into fresh lease agreements or get the termination revoked by the lessors in case it wants to operate these 30-35 aircraft whose lease agreements were terminated around the time the airline filed for insolvency,” the Mint reported on July 20 citing anonymous sources familiar with the matter.

Also Read: Go First provides additional information to DGCA post audit, says official

Moneycontrol couldn't verify the report independently.

On May 2, the budget airline had filed for bankruptcy after reporting loss due to “faulty” Pratt & Whitney engines that grounded about half its 54 Airbus A320neos. However, the US engine maker said that the claims were made without proof.

The cash-strapped airline has stopped flying from May 3 and is yet to pay some senior level executives and pilots.

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“Termination of an aircraft lease is sacrosanct. If the airline has to restart operations, it will have to get lessors on board, as without a lease contract in place, even the insurance of the aircraft comes into question...,” the financial daily quoted the source as saying. The budget carrier has already started preliminary talks to bring lessors on board towards an August relaunch, the report mentioned.

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Aviation regulator DGCA (Directorate General of Civil Aviation) earlier this month began the special audit of the facilities of the airline. Separately, a news report mentioned that the regulator found the beleaguered airline does not have enough pilots and other technical staff for the proposed scale of operations. The resolution professional (RP) has also told the DGCA that Go First has to process refunds of more than Rs 500 crore for flights cancelled till early July and has advance bookings of about Rs 110 crore.