NCLT to decide on Go First’s voluntary resolution process amid aircraft repossession threat

While aircraft lessors vehemently objected to the petition, the National Company Law Tribunal (NCLT) on Thursday, May 4, reserved order regarding the crisis-hit airline Go First’s request for voluntary insolvency resolution proceedings and an interim moratorium on financial obligations.

The Go First Crisis

Go First Airlines, which declared bankruptcy on Tuesday, stated that all of its flights will be canceled from May 3 to May 5 and that all customers will receive a full refund. However, according to some reports, flight operations might not resume until May 15.

The carrier controlled by the Wadia group has also filed a petition with the National Company Law Tribunal, asking for the initiation of voluntary insolvency resolution procedures. 

As per Mint, on Thursday, dozens of pilots, many from the financially troubled Go First airline, gathered at a hotel owned by the Tata group outside of Delhi for walk-in interviews with Air India.

NCLT Verdict

According to reports, the National Company Law Tribunal has reserved its order on Go First’s petition for an interim moratorium to avoid the seizure of its 26 aircraft.

 Go First filed for bankruptcy and requested a moratorium as a temporary measure to stop lessors from seizing planes. The lessors, who were in charge of 26 aircraft, objected to this and filed a lawsuit, claiming that doing so would violate their contract and that they wanted their planes back.

Before the pandemic, the firm had an “impeccable” financial track record and held 8% of the domestic aviation industry. It is now having issues as a result of the engine supply conflict with Pratt & Whitney.

The airline operated by the Wadia group has canceled all of its flights until May 9 due to liabilities of Rs 11,463 crore.

When the NCLT bench questioned Kaul about how the temporary suspension would benefit Go First, Kaul said, “It will keep the airlines in a going concern.”

An Interim Resolution Professional (IRP) assumes management of the firm during the bankruptcy resolution process and performs their task under the direction of the Committee of Creditors (CoC).

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