Go First's resolution professional reassures employees that airline will restart operations

A GoAir aircraft taxis on the tarmac at Bengaluru International Airport in Bangalore

The newly-appointed resolution professional (IRP) for Go First, Abhilash Lal of consultancy firm Alvarez & Marsal, on May 11 reassured employees of the airline that all steps are being taken to ensure that Go First resumes operations soon.

Lal spoke to the employees of Go First in a town hall meeting and asked them to trust the airline while saying that Go First will have to raise some funds in order to restart operations.

"Go First cannot restart without a crew which is why we need all of you to stick with us while we figure out how to restart operations at the earliest," Lal was quoted as saying by an employee of Go First who spoke to Moneycontrol.

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Lal also said that Go First was working on a very tight schedule, but asked them not to be afraid of any change in the daily working of the airline.

He told Go First's employees that they would soon be asked to return to work and that their salaries would not be impacted as long as they are a part of the organization.

However, Lal did not provide a date to employees by which Go First would look to restart operations.

The bankrupt domestic carrier is hoping to return to Indian skies in the next two weeks, after the New Delhi bench of the National Company Law Tribunal (NCLT) on May 10 granted bankruptcy protection to the airline.

"The expectations are that none of Go First's aircraft will be taken away by lessors, which will let the airline return to the skies in around two weeks at the earliest," a source aware of the ongoing discussions said.

The source added that Go First is hoping the IRP, Lal, appointed by the NCLT on May 10, will help negotiate a treaty between the lessors and the airline that will help Go First restart operations.

The NCLT admitted Go First's plea for voluntary insolvency and admitted for the initiation of Corporate Insolvency Resolution Process (CIRP) proceedings. NCLT has granted Go First protection under moratorium from recovery by lessors and lenders.

The tribunal also appointed Lal as its IRP to oversee the company's affairs and revive the airline's business within six months.

Go First's lenders are expected to classify their loans to the company as ‘non-performing’ in the current quarter. They are reportedly hopeful that the collateral backing the credit would reduce the quantum of haircut they have to take.

As per the Reserve Bank of India, banks have to provision for at least 15 percent of outstanding loans on secured assets in the first 12 months. Provision refers to losses that the banks recognise ahead of time, and is a way to eventually anticipate the volume of its gross and net loan portfolio.

As per Go First's bankruptcy filing, Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank are among the airline’s financial creditors.