Go First faces DGCA permit action

The Directorate General of Civil Aviation (DGCA) has issued a show cause notice to Go First, asking the low-fare airline to explain the reasons behind its inability to run operations within 15 days. The aviation regulator also suspended the airline from accepting new bookings and halted the sale of tickets.

The fate of the airline’s flying permit will depend on its response to the notice, the regulator said.

The aviation regulator’s actions and the government’s plan to allocate GoAir’s flight slots to rival airlines if operations remain suspended for a month have cast doubts on Go First’s future after the airline approached the National Company Law Tribunal (NCLT) for insolvency resolution earlier this month.

“In view of the sudden cancellation of flights and initiation of corporate insolvency resolution process under IBC by Go Airlines (India) Ltd (Go First), DGCA has issued a show-cause notice to Go First under the relevant provisions of the Aircraft Rules, 1937, for their failure to continue the operation of the service in a safe, efficient, and reliable manner,” the regulator said in a statement on Monday.

A decision on the continuation of Go First’s air operator certificate (AOC) will be taken on the basis of the response submitted by them, the regulator added.

The validity of an AOC or flying permit to an airline is conditional to an airline company operating flights with a minimum of five aircraft in its fleet. While Go First still has the requisite number of aircraft in its fleet, the Wadia Group airline suspended operations after voluntarily filing insolvency proceedings in the NCLT on 2 May.

The aviation regulator has also asked the airline, which has stopped bookings till 19 May, to stop taking any further bookings.

“Go First has been directed to stop booking and sale of tickets directly or indirectly, with immediate effect and until further orders,” the regulator said in a statement.

In its NCLT petition, the airline blamed engine maker Pratt & Whitney for unserviceable engines, resulting in a 30-50% grounded fleet since 2020, causing losses to the tune of ₹10,800 crore on account of revenue loss and additional expenses.

While the airline sought an interim moratorium on its assets, including aircraft and domestic slots, by the NCLT bench, the bench had stated that an interim moratorium was not valid in the case as it is only implemented in the cases of personal debtors.

Meanwhile, the aircraft lessors opposed the admission of the plea in NCLT as it would have been an impediment in the recovery of planes from Go First.

On 4 May, eight lessors wrote to DGCA seeking the de-registration of 20 aircraft under the Irrevocable De-registration and Export Request Authorisations. Under this, the regulator is required to de-register aircraft within five days from the name of a third party in cases like the default of lease rentals.

“The case for the revival of Go First seems to be weakening after the latest DGCA directive. While the airline was suspending operations in a graded manner and was not terming its cancellation of flights, this draws the curtains on the operations of Go First, at least temporarily,” said an airline executive who did not want to be identified.

The airline used to carry around 30,000 daily air passengers, with a market share of nearly 7% until March 2023. Established in 2005, the airline had a fleet of 54 aircraft, out of which more than 25 aircraft were grounded due to faulty engines supplied by Pratt & Whitney.

Meanwhile, the government is also contemplating starting the process to award flight slots of GoAir to other airlines in case Go First does not resume operations in a month’s time, Mint reported Monday.

“This is also one of the steps necessary at this stage to balance the aviation market in India, which is growing significantly with record domestic travel demand. Slots at domestic airports will soon be adjusted among those airlines which have the ready capacity to deploy and crew available, just like on the lines of Jet Airways,” a government official said on a condition of anonymity.

In a response to Mint's query, a Go First spokesperson said that the airline had stopped taking bookings before the DGCA issued notice to reduce the inconvenience to the passengers.

"Go First is taking all possible measures to reduce passenger inconvenience. As regards the DGCA Notice, the same will be responded to, in due course," the spokesperson added.