Go First crisis: NCLT approves airline's insolvency plea
Go First crisis: On May 4, 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 crisis: The National Company Law Tribunal (NCLT) on Wednesday, May 10, 2023, approved Go First's insolvency plea. As per a report by Zee Business, Go First's board has been suspended and Abhilash Lal has been appointed as Interim Resolution Professional (IRP). Meanwhile, GoFirst's board is directed to deposit Rs 5 crore for regular expenses. The report further said that no employee will be removed from the company. All the flights of the airlines have been cancelled till May 19. Further, the report said that companies who leased their aircraft to the airline will not take back the planes.
On May 4, 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 May 3 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 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
Due to operational reasons, Go First flights until 19th May 2023 are cancelled. We apologise for the inconvenience caused and request customers to visit https://t.co/qRNQ4oQROr for more info. For any queries or concerns, please feel free to contact us. pic.twitter.com/T1WktKJIuZ
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— GO FIRST (@GoFirstairways) May 10, 2023
India's third-largest airline, which recently rebranded as Go First, filed for bankruptcy early this month, blaming Pratt & Whitney's "faulty" engines, which it uses on its Airbus 320 neo aircraft.
The collapse of the first Indian airline since Jet Airways in 2019 comes amid fierce competition in the sector led by its largest rival IndiGo and Tata Group-owned Air India, as passenger traffic roars back after the pandemic, said a Reuters report. "The Wadia group, in particular Nusli Wadia, has always tried to see that the company and the airline operations go on, on a normal basis, in spite of the fact that we are completely disabled to that extent by Pratt & Whitney," CEO Kaushik Khona said. "There is no question of Wadia group having any intention to exit or move out."
On May 2, Go First informed that it halted ticket booking for the next two days - May 3 to May 5 and the airline has grounded 60 per cent of its flights due to a fund crunch. Speaking to PTI, Kaushik Khona, the CEO of the company had said the airline has grounded 28 planes, more than half of its fleet, due to the non-supply of engines by Pratt & Whitney (P&W). This has resulted in a fund crunch.
"It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be done to protect the interests of the company," Khona had said. The airline has informed the government about the developments and will also be submitting a detailed report to the aviation regulator Directorate General of Civil Aviation (DGCA).
गो फर्स्ट की याचिका को NCLT से मंजूरी, गो फर्स्ट का बोर्ड सस्पेंड, IRP नियुक्त
— Zee Business (@ZeeBusiness) May 10, 2023
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