The Directorate General of Civil Aviation (DGCA) is reportedly moving to permanently revoke Go First’s domestic airport slots and international flying rights, indicating potential obstacles for the troubled airline’s revival. According to industry insiders, Go First, which has been grounded for a year now, risks losing its slots under Slot Allocation Guidelines, 2013, as it hasn’t utilized any airport slots in the past year.
A senior government official stated that as per regulations, airlines can claim a right to slots if they comply with annual slot adherence norms, running at least 80% of their committed departures. However, since Go First hasn’t operated any flights, it’s losing its historical precedence to slots.
The airline’s domestic slots have already been reassigned to other carriers, with international flying rights to follow suit soon. While temporary allocations were made for the Winter Schedule 2023 and Summer Schedule 2024, these allocations are set to become permanent by the end of the month.
This move is expected to further impact the valuation of Go First, which has been undergoing bankruptcy proceedings. The airline’s remaining assets, including a significant land parcel in Thane, are valued at around Rs 3,000 crore. However, discussions between Go First’s Resolution Professional and the Committee of Creditors have hit roadblocks, and losing more assets could impede the airline’s revival.
The fate of Go First’s flying rights after insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) 2016 varies depending on several factors, including regulatory decisions. The situation is reminiscent of the Jet Airways case in 2021, where slots were allocated based on existing guidelines.
The bankruptcy filing of Go First in May 2023 was attributed to financial troubles exacerbated by issues with Pratt & Whitney engines, leading to the grounding of a significant portion of its fleet. The airline ceased operations the following day, with total liabilities amounting to approximately Rs 11,463 crore.
Despite NCLT granting a 60-day extension for completing the insolvency resolution process, challenges persist for Go First’s potential revival, underscoring the complexities of airline operations amidst financial distress.
