Go First Airlines Insolvent

Go Airlines petitioned the NCLT to begin the corporate bankruptcy resolution procedure against it under the Bankruptcy and Bankruptcy Code (IBC)To prevent prospective lessors from taking ownership of its 26 aircraft, the business requested the installation of an interim moratorium. The continuation of the company’s business, which would affect the employment of 7,000 direct and 10,000 indirect employees as well as the repayment of debt to creditors, would be in jeopardy if it lost custody of the aircraft and the legal authority to operate them. Go First requested the start of CIRP because the percentage of grounded aircraft climbed from 31% in 2020 to more than 50% in April 2023 as a result of problematic engines provided by the American company Pratt & Whitney (P&W). They claimed that the company had a loss of over ₹10,800 crore due to the faulty engine of America company. The company had filed a suit against an American company in the international arbitration tribunal in America and claimed damages of loss they suffered because of their faulty engine parts and machine.

Observation of NCLT  

 The National Firm Law Tribunal’s (NCLT) Delhi principal bench, presided over by President Justice Ramalingam Sudhakar and technical member LN Gupta, will rule on Go First Airlines’ request to initiate voluntary insolvency proceedings against the firm. It had saved the petition for instructions.

The airline firm came before the bench because it needed a quick resolution to its request for a temporary moratorium. Aircraft lessors had started the process with the Directorate General of Civil Aviation (DGCA) to take control of their aircraft, Senior Advocate P Nagesh said to the court. The National Company Law Tribunal (NCLT) primary bench in Delhi will decide whether to grant Go First Airlines’ request for the opening of voluntary insolvency proceedings against the airline. The tribunal promised the attorney that they will consider the request.