GoAir raises ₹30 crore for working capital

Wadia group-owned GoAir is believed to have raised ₹30 crore of working capital in June. This comes even as the low-cost-carrier is struggling to stay afloat due to mounting debt, and the Covid-19 pandemic.

According to a source, GoAir has secured a loan for working capital from Axis Bank for twelve months. Besides this, in April this year, GoAir had secured a loan worth ₹15 crore. A detailed query sent to GoAir did not get a response.

Last month, Credit Rating Agency, India Ratings had downgraded GoAir to ‘Ind BBB+’ on rising debt and sliding operating performance in FY21. The report had claimed that GoAir’s overall debt was up to ₹1,891 crore in the June quarter which was six per cent higher. It also stated that GoAir’s cash and bank balance have nearly halved to ₹72.5 crore during the said period.

However, a GoAir spokesperson had said that the report was “incorrect and way off-the-mark.” The spokesperson had claimed that GoAir has more than adequate cash and bank balance to support its operations.

Earlier this month, BusinessLine had reported that GoAir was put on cash-and-carry mode by Airports Authority of India (AAI) over unpaid dues to the tune of ₹60.75 crore.

AAI sources have now told BusinessLine that earlier this week, GoAir has paid ₹2 crore as an initial payment for using services of the AAI. However, the source said that “GoAir is yet to pay the past dues, else, AAI will encash the bank guarantees worth ₹82 crore. AAI will review the situation until August 27 before taking this decision.”

Like every airline, GoAir, too, is faced with multiple challenges. It has sent multiple employees on leave without pay and has reduced its operations to only 15-18 daily flights instead of operating a full fleet of 55 aircraft.

According to industry experts and company insiders, if the airline manages to keep its operations to 15-18 aircraft, it can stay afloat for some time.

To stay afloat, GoAir is also mulling to retire 12 of its A320 CEOs earlier than scheduled as a cost-cutting measure and due to the subdued demand in post-Covid times. However, the lessors of at least seven aircraft are playing hardball and have demanded a balloon payment on lease rentals for the remaining period.