Go First extends flight cancellations till May 28 amidst ongoing financial crisis

 

Go First, the airline formerly known as GoAir, is facing a severe financial crisis that has forced it to suspend its flight operations till May 28. The airline, which is undergoing insolvency resolution proceedings, has cited operational reasons for the cancellations and has assured its customers that it will issue full refunds shortly.

What led to the crisis?

Go First has been struggling with mounting debt and liabilities for a long time, exacerbated by the COVID-19 pandemic that has hit the aviation industry hard. The airline has reported losses of over Rs 1,000 crore in the last two fiscal years and has defaulted on payments to various stakeholders, including aircraft lessors, lenders, vendors and employees.

The airline has also faced opposition from some of its aircraft lessors, who have moved the National Company Law Appellate Tribunal (NCLAT) against the National Company Law Tribunal’s (NCLT) decision to admit Go First’s voluntary plea for insolvency resolution on May 10. The lessors have argued that they have the right to repossess their planes under the Cape Town Convention, an international treaty that governs the rights of creditors in cross-border leases of aircraft.

Go First has also witnessed an exodus of its pilots and other staff, who have either resigned or been poached by other airlines. The airline has reportedly lost over 100 pilots in the last few months, leaving it with a severe shortage of crew.

What is the way forward?

Go First has appointed Abhilash Lal as the Interim Resolution Professional (IRP) to manage its affairs and oversee the Corporate Insolvency Resolution Process (CIRP). The IRP has launched a claim management portal ‘gofirstclaims.in/claims’ for creditors and other stakeholders to submit their claims against the airline.

The IRP has also invited expressions of interest (EOIs) from potential investors who are willing to infuse funds into the airline and revive its operations. The last date for submitting EOIs is June 10.

Go First has expressed hope that it will be able to resume bookings shortly and restore normalcy in its services. The airline has also sought support from its customers, employees and partners in this difficult time.

What does this mean for passengers?

Passengers who have booked flights with Go First till May 28 will be eligible for a full refund, which will be processed to their original mode of payment. However, they may have to wait for some time before they receive their money, as the airline’s finances are under the control of the IRP.

Passengers who have booked flights after May 28 may face uncertainty and inconvenience, as there is no guarantee that the airline will be able to resume operations by then. They may have to look for alternative options or cancel their bookings if they do not wish to take any risk.

Passengers who have booked flights through travel agents or online platforms may have to contact them directly for any queries or assistance regarding their bookings.