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Go First seeks NCLT directions to restrain lessors, DGCA from taking any action

The Wadia group-owned airline, which has liabilities worth Rs 11,463 crore, has sought voluntary insolvency resolution proceedings

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PTI
New Delhi | Published 04.05.23, 10:15 AM

Crisis-hit Go First has sought various interim directions from the National Company Law Tribunal, including restraining lessors from taking back aircraft and regulator DGCA from taking any adverse action against the airline.

The Wadia group-owned airline, which 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.

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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 Air India, AirAsia and SpiceJet already reeling under financial stress, if Go First is not resolved, then it will further monopolise the market leading to loss of consumers and all the stakeholders, it said.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

Directorate General Of Civil Aviation (DGCA) Go First National Company Law Tribunal (NCLT)
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