Go Airlines record net loss of ₹470 crore in first nine months of FY2021

Our Bureau Mumbai | Updated on May 14, 2021

Files DRHP to raise ₹3,600 crore even as business gets hammered by Covid-19

Go Airlines Ltd has recorded a net loss of ₹ 470 crore in the nine months ended December 31, 2020 as the aviation industry faces significant business challenges as a result of the Covid-19 pandemic's effects.

“For the month of December 2020, our departures were at approximately 63 per cent of the departures during December 2019 and our growth ASKs were at approximately 72 per cent of the pre-Covid-19 levels.This has led to a sudden and significant decline in our revenues and profitability from late February 2020 and as a result, we recorded a net loss of ₹4,706.9 million in the nine months ended December 31, 2020,” the company said in its DRHP filing to raise ₹3,600 crore through an initial public offering. The airline plans to use ₹2,015 crore for prepayment or scheduled repayment of all or a portion of certain outstanding borrowings, ₹279 crore for replacement of letter of credits, which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircraft, with cash deposit, and ₹254 crore for repayment of dues to Indian Oil Corporation Limited, in part or full, for fuel supplied.

Also read: GoAir rebrands as Go First in a shift to ultra-low-cost airline model

The airline said that it has a negative net worth amounting to ₹ 1,961 crore and current liabilities exceeding our current assets by ₹ 4,362 crore.

Notice for delayed payments

The airline said it was unable to make payments for some aircraft lease agreements, supply agreements and agreements with other service providers and have received certain notices for delayed payments or non-payments. “Due to the impact of Covid-19 on our business, there is no assurance that we will be able to make all our payments in respect outstanding obligations and/or as they become due, and these may become subject to disputes relating to non-payment that may have a material adverse impact on our business,” the airline said.

The company also had to undertake a furlough of its employees across all departments. During the lockdown, it introduced graded pay cuts for management staff that were working and not on leave without pay, starting with 50 per cent for the Chief Executive Officer extending down to 5 per cent. “From April 2020 to June 2020, approximately 3,800 employees were put on furlough, post which we started employing due to increase in the business,” it said.

“We also had to raise funding from a Wadia group company to increase our liquidity by way of an equity infusion and non-fund-based support. We raised ₹ 970 million as equity and non-fund-based support of $50 million was arranged through our subsidiary, Go Singapore during Fiscal 2020. In Fiscal 2021, we availed of an additional fund-based (including non-fund based sub-limits) line of credit of ₹ 5,000 million from ICICI Bank Limited. We have been further sanctioned an additional facility of ₹ 3,420 million by Deutsche Bank AG, which we have fully availed. We recently raised ₹ 5,460 million as equity from Baymanco Investments Limited, a member of our Promoter Group,”it added

Published on May 14, 2021

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