Go First Granted Bankruptcy Protection By Indian Tribunal

On Wednesday, May 10, the National Company Law Tribunal (NCLT) of India granted bankruptcy protection to Go Airlines (India) Ltd, which recently rebranded as Go First.

The decision comes as a relief for the country’s fourth-largest carrier, which can now attempt to revive itself amid financial turmoil. However, it complicates matters for foreign lessors looking to repossess their planes.

Go First Filed for Insolvency Resolution

Go First, the low-cost airline, filed for insolvency resolution on May 2, 2023, and owes ₹6,521 crores to various financial creditors, including some Indian banks. The airline has cited “faulty” Pratt & Whitney engines as the reason behind its financial crisis, which grounded approximately half of its 54 Airbus A320neos.

Interim Resolution Professional Takes Over Management

Following the NCLT’s decision, an interim resolution professional will take over the management of Go First with immediate effect. The NCLT has also ordered a moratorium on the airline’s assets and leases.

Also Read: DGCA Issues Show Cause Notice to Go First, Asks to Stop All Bookings Till Further Orders

Complications for Foreign Lessors

While the decision is positive news for Go First, it complicates matters for foreign lessors looking to repossess their planes. Go First had leased aircraft from foreign lessors, and the bankruptcy protection means that they cannot repossess the planes until the resolution process is complete.

Pratt & Whitney Denies Claims Without Evidence

In response to Go First’s claims about “faulty” Pratt & Whitney engines, the U.S. engine maker, which is part of Raytheon Technologies, has denied the allegations without evidence.

In conclusion, the NCLT’s decision to grant bankruptcy protection to Go First provides the airline with an opportunity to restructure and revive its operations. However, it also presents a challenge for foreign lessors looking to repossess their planes. Pratt & Whitney’s denial of the claims made by Go First adds another layer of complexity to the situation.