Air India and IndiGo are holding separate discussions with Go First’s lessors along with airport operators for landing and parking slots in New Delhi and Mumbai, sources claim. According to the Directorate General of Civil Aviation filings, Go First’s lessors are seeking to repossess 36 aircraft.
However, this clamour for Go First’s assets might complicate its attempt to restructure debt and restart operations.
Sources close to Go First have claimed that the airline plans to resume operations from May 24. and that airline has worked on a business plan to restart with 23 aircraft with limited operations.
The airline has 51 departure slots at Delhi and 37 at Mumbai airport. The airline has been in discussions with the Indian government about its plans to resume flights and will approach the authorities for permission to resume bookings. The airline has also prepared a resumption plan to submit to the Directorate General of Civil Aviation (DGCA) that outlines the number of aircraft it will operate and the destinations it will serve.
Meanwhile the newly-appointed resolution professional Abhilash Lal of Alvarez & Marsal informed Go First staff that the airline will need to raise funds to continue, Reuter reports.
Separately, Go First 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, the agency reported.
The report quoted a banker saying that the account will have to be declared a non-performing asset in the current quarter, and the account will also have to be provided for. As per the Reserve Bank of India, banks have to provision for at least 15% 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 the Go First bankruptcy filing, Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank are among the airline’s financial creditors.