DGCA issues show cause notice to GoFirst | 10 points on airline's crisis
2 min read . Updated: 03 May 2023, 06:16 AM IST
PremiumGoFirst crisis: DGCA on Wednesday issued a show cause notice to India's low-cost carrier for not providing prior intimation of the cancelation of flights on May 3 and May 4 to the regulator.
Ultra-low-cost carrier Go First Airlines sought voluntary insolvency resolution proceedings on Tuesday, canceling flights and bookings for the next three days. Passengers who booked their tickets with the airlines are left in the middle of nowhere.
Currently, the no-frills airline has liabilities of nearly ₹9,000 crores and is plagued by a whole host of problems. It said that due to the non-supply of engines by the US-based Jet engines manufacturer, operations will remain canceled.
Here's a 10-point guide on the GoFirst crisis
1) Go First Airlines on Tuesday announced that its flight operations will remain cancelled from May 3 to May 5 adding that a full refund will be issued to the passengers. Counters of Go First Airlines lie deserted at Amritsar airport as the cash-strapped airlines ground their flights.
2) A passenger of Go First Airlines said that the airline is only talking about giving a refund but “I have my flight to Mumbai, as I reached the airport there was nobody at the counter...we asked to adjust us to other flights but the airline is only talking about giving us a refund."
3) Union Civil Aviation Minister Jyotiraditya Scindia said that the Government of India has been assisting Go First Airlines in every possible manner but it is incumbent upon the airline to make alternative travel arrangements for passengers so that they do not face inconvenience.
4) DGCA on Wednesday issued a show cause notice to India's low-cost carrier Go First Airlines for not providing prior intimation of the cancelation of flights on May 3 and May 4 to DGCA.
5) India's low-cost air carrier Go First informed that the company has filed an application with National Company Law Tribunal (NCLT).
6) "Go First today filed an application with the National Company Law Tribunal (NCLT) Delhi for resolution under section 10 of the Insolvency Bankruptcy Code," the statement read.
7) The airline cites "serial failure" of Pratt & Whitney engines resulting in the grounding of 50% of the fleet as the reason behind its insolvency plea. It claimed that it was no longer in a position to continue meeting financial obligations.
8) Go First had been confident about receiving a major financial boost in the form of promoter equity and bank loan by the end of April. Reports indicate that this ₹600 crore loan is yet to come to fruition.
9) The amount will reportedly include ₹300 crore provided by the Wadia Group as well as funding from a consortium of banks. The company was expected to use the money to address its ongoing supply chain woes.
10) It is pertinent to note here that the company had earlier received around ₹1,000 crore from the government's Emergency Credit Line Guarantee Scheme.
(With inputs from agencies)