Gofirst owes over ₹62 crore in dues to 40 airports, Indian as well as international as on April 28, according to court documents. The airline has made provisions for only up to ₹39 crore. Though the airline has bank guarantees and advances to support its dues, with at least more than half of the said airports, its dues are beyond the bank guarantees and advances.
According to industry players and experts, the airline maybe put on cash and carry mode for operations. However, the dues will keep getting accrued till such time the airline does not decide to pay.
Within Indian airports, its highest dues are towards metro airports such as Bangalore and Delhi to the tune of ₹3 crore each. The list of airports includes public airports owned by the Airports Authority of India. Its dues towards international airports including Abu Dhabi and Maldives airport go up to ₹8 crore and ₹13 crore respectively , according to exclusive access to GoFirst’s court documents reviewed by businessline .
According to the documents, its total dues to its hundreds of vendors as on April 28 are ₹819 crore, whereas, it has made provisions for only up to ₹638 crore.
The airline had filed for voluntary insolvency on May 2. In its application, the airline had said it owed “substantial amounts” to lessors, lenders and vendors. Its total liabilities to all creditors amount to ₹11,463 crore, which includes dues to banks, financial institutions, vendors, and aircraft lessors. Financial institutions are owed ₹6,521 crore, and the company has defaulted on payments to operational creditors.
The insolvency petition was admitted on May 10. With this, the NCLT had also implemented a moratorium. The moratorium essentially meant a status quo would be maintained on any of its operational and financial creditors over dues. It would also essentially mean that the creditors would not invoke bank guarantees.
The company has said it has up to ₹300 crore to restart its operations, though the airline has not given a timeline for resumption . The airline has been in conversation with airports to at least put them on cash and carry basis since there may not be a timeline on when the airline can pay back the previous dues.
A person in the know said that the airline may be put on cash and carry but its dues will still continue to accumulate.
Effect on airport operator
“For the airports, landing parking and housing charges are an important source of revenue. Any inability of the airline to pay these dues can impact the airport operator in a negative manner. Also, as the aircrafts are grounded temporarily, there could be an opportunity cost for the airport operator as well,” explained Jagannarayan Padmanabhan, Senior Director and Global Head at CRISIL.
The airline has 54 aircraft in its fleet which are parked at multiple airports across the country. An industry expert, requesting anonymity said that the airline’s dues towards these airports will keep on accruing. “As the planes are currently grounded, there is increased uncertainty to the airport operator for recovery of the past dues in a time-bound manner and also for the time it is currently grounded, clarity has to emerge on who will pay and what will be the quantum of payment,” he said.