Go First insolvency: Travel agents claim Rs 900 crore stuck, seek govt help

A key association of travel and tourism companies in India has claimed that around Rs 900 crore is stuck with Go First in the form of advances and forward bookings, and sought the government’s help in securing refunds.  

The Travel Agents Association of India (TAAI), which has about 2,500 companies as its members, put forth the estimate in a representation to Civil Aviation Minister Jyotiraditya Scindia on Tuesday. “We need to be protected, and a law regarding refunds needs to be reconsidered. We pay advances to low-cost airlines and all tickets are issued from our credit shells created by the airline and under its possession,” it said.

The association said domestic tourism had multiplied and this was the peak season due to summer holidays. “Go First flights have been booked to 90-93 per cent capacity by our members for this holiday season. As a result, an estimated Rs 900 crore of our trade is stuck with the airline,” it said. 

While travel agents are ascertaining the exact amount, they have asked the government to direct Go First, which has approached the National Company Law Tribunal with a voluntary insolvency resolution plea, to promptly refund all the pending dues.

TAAI President Jyoti Mayal said there was an apprehension that the travel industry and customers would lose the amounts due to them for services not rendered by the airline.

There was no immediate reaction from the civil aviation ministry. Go First didn’t respond to a text message query, but said in a statement that it is taking all possible measures to reduce passenger inconvenience.

“We had already stopped taking bookings, before the DGCA issued the notice. The notice will be responded to, in due course,” the airline said.

On Monday, the Directorate General of Civil Aviation (DGCA) issued a show-cause notice to the airline, asking why its operator’s certificate should not be cancelled. Last Thursday, the regulator had asked the airline to refund affected passengers as per regulations.

Go First was operating around 200 flights daily and carrying 25,000-30,000 passengers before temporarily suspending flights on May 2. Its top routes included Delhi-Srinagar, Delhi-Leh, and Mumbai Goa.

The sudden cancellation left hundreds of tourists in the lurch who had to shell out extra sums to complete their trips.

Grounded!

• Go First operated around 200 flights daily, carrying 25,000-30,000 passengers

• Top routes included Delhi-Srinagar, Delhi-Leh, and Mumbai-Goa

• DGCA asked airline to stop all bookings following its insolvency plea

• Sudden flight cancellations left hundreds of tourists in the lurch

• Travel agents want refunds to be paid directly to their accounts instead of credit shells