Go First: Airline gets boost as lenders agree on interim funding

In a development that could get Go First flying again, a consortium of lenders has approved interim funding of approximately Rs 400 crore, news reports said on Sunday. This decision represents a crucial milestone in the ongoing endeavours to keep the airline afloat.

Moneycontrol was the first to report that the Committee of Creditors (CoC), comprising Central Bank of India, Bank of Baroda, Deutsche Bank, and IDBI Bank, agreed on Saturday night to provide additional funding, according to the aforementioned sources. Go First had recently approached the lenders seeking capital to sustain its operations, pledging to restore normalcy swiftly.

The website quoted three bankers saying that the lenders have sanctioned approximately Rs 400 crore to Go First based on its business plan and to facilitate the revival of operations. The report said, ‘Lenders have agreed to fresh funding based on the business plan and to revive operations. The amount is around Rs 400 crore.’

Reports suggest that the decision was taken following a voting process on Saturday, with lenders agreeing to consider providing additional contingency funding as and when required in the future for specific events.

Go First currently owes Rs 6,521 crore to its lenders, with Central Bank of India having the highest exposure of Rs 1,987 crore, followed by Bank of Baroda at Rs 1,430 crore, Deutsche Bank at Rs 1,320 crore, and IDBI Bank at Rs 58 crore, according to a report by Acuite Ratings and Research on January 19.

With the creditor’s decision, experts said the spotlight now turns to the Director General of Civil Aviation (DGCA). The DGCA is currently reviewing an application submitted by the airline to resume operations.

"All eyes are now on DGCA, which is likely to decide on clearance following an inspection of the fleet and other necessary checks. The hope is to start flying as soon as possible," officials in the know said.

Go First would require approval from the aviation regulator to commence operations and resume ticket sales, initially operating flights covering 78 routes with approximately 22 aircraft from July 1.

Meanwhile, the airline announced that its scheduled flight operations would remain cancelled till June 28 due to operational reasons. Earlier, the airline said that operations would remain cancelled till June 25. Go First grounded all its flights on May 3, with the Wadia-owned airline blaming its situation on the delays in the delivery of Pratt and Whitney's engines.