Go First At NCLT: Airline appeals for appointment of Insolvency Resolution Professional

Go First airways which has filed for bankruptcy at the National Company Law Tribunal (NCLT) has in its first hearing at the court appealed that an Insolvency Resolution Professional (IRP) be appointed to help with the commencement of the resolution process and turnaround of the airline. 

According to a report by ANI, "Go First has sought further direction from the NCLT hat an ad-interim relief be provided in the form of interim moratorium if NCLT does doesn't admit the plea today. Go First informs the NCLT court that the bank account of the consortium is frozen . Hearing is currently underway. 

The Wadia group-owned airline, has liabilities worth Rs 11,463 crore, has sought voluntary insolvency resolution proceedings and the plea is set to be heard by the Delhi bench of the NCLT on Thursday. Go First has cancelled all its flights for three days starting from May 3.

In its petition filed before NCLT, the budget airline has sought directions to restrain aircraft lessors from taking any recovery action as well as restrain the DGCA and suppliers of essential goods and services from initiating adverse actions.
Another plea is that the DGCA, Airports Authority of India (AAI), and private airport operators should not cancel any departure and parking slots allotted to the company.

The airline also wants fuel suppliers to continue supply for aircraft operations and not terminate the present contractual arrangements. Go First, which started flying more than 17 years ago, has said the non-supply of engines by Pratt & Whitney resulting in the grounding of more than half of its fleet has led to the current situation.

The carrier has total liabilities of Rs 11,463 crore to all creditors, including a default of Rs 3,856 crore towards operational creditors. The dues towards aircraft lessors is Rs 2,600 crore, according to the plea filed before NCLT.
As on April 30, the debt exposure towards financial creditors stood at Rs 6,521 crore.

The airline's net loss rose to Rs 3,600 crore last fiscal from Rs 1,807.8 crore in 2021-22. The net loss was at Rs 1,346.72 crore in 2020-21. Further, Go First has cited the example of Jet Airways, saying that lessors took swift re-possession of the planes leading to serious depletion of its asset value. Citing Jet Airways, the Wadia group firm said prior to insolvency, it had a fleet size of 112 aircraft. However, after the insolvency was triggered against Jet Airways, it was left with only 11 aircraft, which significantly affected its prospects of resolution under IBC, said Go First.

CIRP refers to Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code (IBC).
Go First has a domestic market share of around 8 per cent.  (with agency inputs)