GoFirst, the Wadia-owned airline, is evaluating resuming operations with a downsized fleet size of 16-17 due to the Singapore International Arbitration Centre (SIAC) interim order and a reduced number of pilots, with an aim to gradually increase operations. The airline had initially planned its operations based on 404 pilots available, but is currently faced with approximately 330 pilots on its payroll, including an imbalance of first officers to captains.

The SIAC order allowed engine maker Pratt and Whitney to supply only five engines per month, as opposed to the initially expected 10 engines. This has put further strain on GoFirst’s operations and has compelled the airline to restart its services with fewer aircraft than originally intended. Earlier, the airline had plans to restart operations with 26 aircraft including four on standy.

Addressing clarifications

Shailendra Ajmera, the Resolution Professional of GoFirst, along with other members of the GoFirst team, recently met with officials from the Directorate General of Civil Aviation (DGCA) to address the clarifications sought by the regulatory authority. The DGCA raised concerns about the airline’s revised plans and the impact it might have on the airline’s revenue stream.

“The airline had originally planned its operations with 404 pilots on its payroll. However, it currently employs approximately 330 pilots, with a surplus of first officers compared with captains. Additionally, the SIAC interim order has compelled Pratt and Whitney to reduce engine supply to only five engines per month, leading the airline to restart operations with a smaller fleet,” sources close to the matter said.

Revenue stream

Bankers fret that downsizing operations may impact the airline’s revenue stream. However, the lenders have been informed that with this the immediate variable costs would also reduce. “The airline hasn’t scaled down the operations in its revival plan. It will gradually restart operations.” 

The airline aims to carefully manage its pilot and engine spares to ensure a smooth rescaling process. While this strategic downsizing may impact the company’s revenue in the short term, it is expected to reduce immediate variable costs, according to sources familiar with the matter. 

There is still no definitive timeline for when GoFirst can restart operations. The airline has already suspended its services until July 23, awaiting further developments. Additionally, the Committee of Creditors has filed a petition before the National Company Law Tribunal (NCLT) to participate in the ongoing GoFirst matters, which includes negotiations with engine and aircraft lessors, along with the primary insolvency petition.

In response to the situation, the DGCA is currently reviewing the revival plan submitted by the Resolution Professional. The Ministry of Civil Aviation has informed the Lok Sabha that the resumption of GoFirst’s operations will be subject to the outcome of the safety audit and any ongoing legal cases.

comment COMMENT NOW