New Delhi/Mumbai: Skies are getting more cloudy for the cash-starved Go First with aviation regulator DGCA on Monday directing the airline to immediately stop ticket sales, lessors seeking deregistration of another 13 planes and the NCLT yet to give its ruling on the voluntary insolvency resolution proceedings plea.
On Monday, Go First requested the National Company Law Tribunal (NCLT) for an early decision on its plea for voluntary insolvency resolution proceedings before the two-member bench headed by tribunal President Ramalingam Sudhakar.
Another bench which heard the petition of an operational creditor SS Associates Services Pvt Ltd seeking insolvency proceedings against the carrier said the matter needs to be listed before the bench headed by the president.
As uncertainties rise over the future of the no-frills airline, the Directorate General of Civil Aviation (DGCA) has directed the carrier to immediately stop bookings and sale of tickets till further orders.
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The regulator has also issued a show cause notice to the budget carrier under the relevant provisions of the Aircraft Rules, 1937, for its failure to continue the operation of the service in a safe, efficient and reliable manner, the source said.
In a setback to the ailing airline, lessors have so far sought the deregistration of 36 planes of Go First.
As many as 28 planes or more than half of the airline’s fleet are grounded due to non-supply of engines by Pratt & Whitney (P&W), the airline’s chief Kaushik Khona said on May 2.
Earlier, Go First suspended ticket sales till May 15 and cancelled flights till May 12. The cash-strapped carrier has not flown since May 3, a day after filing for voluntary insolvency resolution proceedings before the NCLT.
The source said the DGCA has asked the airline to submit its reply within 15 days of the receipt of the show cause notice, and further, a decision on the continuation of its Air Operators Certificate (AOC) will be taken on the basis of the reply submitted by it.
With liabilities worth Rs 11,463 crore and a financial crunch, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
The lessors of the carrier have opposed Go First’s plea for an interim moratorium contending that it would have “harmful and serious consequences”.
The carrier has total liabilities of Rs 11,463 crore to all creditors, including a default of Rs 3,856 crore towards operational creditors. The dues towards aircraft lessors are Rs 2,600 crore.
Meanwhile, the NCLT on Monday issued a notice to SpiceJet on a petition filed by an aircraft lessor, seeking initiation of insolvency resolution proceedings against the budget carrier, and the next hearing is scheduled for May 17.
The petition was filed by Aircastle (Ireland) Ltd.