Go First’s Insolvency Plea Admited, Tribunal Orders No Job Cuts

The NCLT had ordered to keep Go First as a going concern and ensure that no employees are sacked during the time.

New Delhi: In a major relief for debt-ridden IndiGo, the National Company Law Tribunal (NCLT) on Wednesday admitted Go First’s plea to initiate the insolvency resolution process against the airline. The NCLT had ordered to keep the company as a going concern and ensure that no employees are sacked during the time.

A two-member bench comprising President Justice Ramalingam Sudhakar and L N Gupta also appointed Abhliash Lal as interim resolution professional (IRP) to run the company. It has put the company under protection of moratorium and directed the suspended board of directors to assist the IRP to run the company during insolvency proceedings.

The NCLT also directed the company to give Rs 5 crore to IRP to meet immediate expenses for insolvency process. According to the order, IRP has been asked to take necessary steps including execution of the arbitral awards, keep it as a going concern and run its services smoothly.

On May 4, the NCLT reserved its order after hearing the Wadia group-owned carrier and its aircraft lessors who have opposed the petition seeking interim protection.

Go First, which has been flying for more than 17 years, stopped flights from May 3 amid financial crunch caused by grounding of more than half of its fleet due to non-availability of Pratt & Whitney engines.

With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.

Historic decision, says Go First CEO

Go First CEO Kaushik Khona called NCLT admitting the plea of Go First airlines for insolvency proceedings a “historic decision”. “I think this is a historic decision. It’s going to really help the process. We are very grateful for the entire process which has undergone. I amsure this is in line with the spirit of the IBC so that we are able to take decisions on the revival. Millions of prayers have been heard and I think we could not have got a better order than this,” Khona said.

#WATCH | Delhi: On NCLT admitting the plea of Go Airlines for insolvency proceedings, Go First CEO Kaushik Khona says, “I think this is a historic decision. It’s going to really help the process. We’re very grateful for the entire process which has undergone. I’m sure this is in… pic.twitter.com/zE1cps2Hyd

— ANI (@ANI) May 10, 2023

Go First has already suspended the sale of tickets till May 15. As many as 28 planes or more than half of the airline’s fleet are grounded due to the non-supply of engines by Pratt & Whitney (P&W).

The lessors of the carrier have opposed Go First’s plea for an interim moratorium contending that it would have “harmful and serious consequences”. Besides, Go First is facing two more petitions seeking insolvency proceedings against it.

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