The National Company Law Tribunal (NCLT) on Wednesday admitted Go First’s voluntary plea to initiate the insolvency resolution process against the airline.
A two-member bench comprising President Justice Ramalingam Sudhakar and L N Gupta also appointed Abhliash Lal as interim resolution professional (IRP) to run the debt-ridden company. The NCLT directed the company's suspended board of directors to cooperate with the IRP to ensure there are no layoffs in due course of proceedings. The NCLT also directed the company to give Rs 5 crore to IRP to meet immediate expenses for the insolvency process.
The NCLT bench has put the company under the protection of moratorium and directed the suspended board of directors to assist the IRP in running the company during insolvency proceedings.
So far, lessors of close to 40 aircraft have moved the Directorate General of Civil Aviation (DGCA) to take possession of Go First planes, filings with India’s aviation regulator show.
Wadia group-owned Go First on 2 May 2023 said it has filed for insolvency resolution and can no longer continue to meet financial obligations, squarely blaming US company Pratt & Whitney's "faulty engines" for grounding 50 per cent of its fleet. The embattled airline had approached the National Company Law Tribunal earlier this week, citing urgency in the matter and sought orders on its application to allow a temporary moratorium.
On 4 May 2023, the NCLT reserved its order after hearing the Wadia group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection.
Go First, which has been flying for more than 17 years, stopped flights on 3 May 2023 amid a financial crunch caused by the grounding of more than half of its fleet due to the non-availability of Pratt & Whitney engines.
With liabilities worth Rs. 11,463 crores, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
Go First has already suspended the sale of tickets till 15 May 2023.
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