The creditors of Go First, a cash-strapped airline, have approved an interim finance of Rs 425 crore. This fund is intended to revive the airline operations, pending board approvals and clearance from the Directorate General of Civil Aviation DGCA. Its primary purpose is to address the airline’s immediate working capital needs and facilitate the restart of operations. Furthermore, the creditors have also granted approval for a restructuring plan for the airline. This plan is expected to be submitted to the National Company Law Tribunal NCLT in the near future.
Go First, previously known as GoAir, has faced grounding since April 2022 due to financial constraints. It has been unable to secure fresh funds from investors and fulfill its debt obligations. The approval of the interim fund marks a positive development for Go First. This could potentially lead to a resumption of operations in the near future. However, before the airline can commence flying again, it still needs to obtain regulatory clearance from the DGCA.
The Directorate General of Civil Aviation (DGCA) is expected to review Go First’s restructuring plan. The purpose is to ensure that the airline meets compliance and safety standards before resuming operations. The regulator needs to be convinced that Go First has sufficient financial resources to operate securely and sustainably.
If granted permission by the DGCA, Go First could resume its operations within the upcoming weeks. However, the long-term viability of the airline depends on two key factors. First, it needs to raise fresh funds to support its operations and finance its restructuring plan. Second, it must effectively execute its restructuring plan to streamline its operations, optimize costs, and enhance its competitiveness in the market. These two factors are crucial for the airline’s success and its ability to sustain itself in the long run.
