GoFirst Airline files for bankruptcy, the NCLT states it has “no choice but to accept the voluntary insolvency plea.”
Go First, which was in financial trouble, filed a petition under Section 10 of the Insolvency and Bankruptcy Code (IBC), and the bankruptcy court of India issued its decision on May 10. The NCLT, which reserved its decision on the dispute on May 4, granted the airline’s request for an interim moratorium order. Pratt & Whitney’s failure to provide engines was cited by GoFirst in a motion to the tribunal for voluntary bankruptcy.
How the Go First situation played out
The skies appear to be more clear for the airline that is short on cash after more than a week of uncertainty. First, go. Here is a quick timeline of what has happened during the last nine days.
Go First suspends all flights until May 5 after filing for voluntary insolvency resolution on May 2 and requesting an interim suspension on financial commitments.
Aviation regulator on May 4 Flights are abruptly suspended, and the Directorate General of Civil Aviation (DGCA) issues a show cause notice to Go First. Go First halts ticket sales until May 15 On Go First’s petition, the National Company Law Tribunal (NCLT) has not yet made a decision.
Go First cancels all flights till May 12 on May 5.
May 8 – DGCA urges Go First to ask NCLT to make a ruling quickly regarding its petition. Go First to instantly halt ticket sales until more requests are received
Go First states that it will respond to the DGCA show cause notice in due time on May 9. In the past week, lessors have requested the deregistration of 45 Go First aircraft.
Go First’s petition for insolvency resolution procedures is accepted by NCLT on May 10; an airline moratorium is put in place.
According to the airline’s CEO Kaushik Khona, as many as 28 aircraft, or more than half of its fleet, are grounded as a result of Pratt & Whitney’s (P&W) failure to furnish engines on May 2, the day the airline initiated voluntary insolvency resolution procedures.
The airline owes a total of Rs 11,463 crore to creditors, including banks, financial institutions, vendors, and aircraft lessors.
