Massive Relief For Go First As NCLT Accepts Its Voluntary Insolvency Plea

New Delhi: Today is an important day for cash-strapped airline Go First and it’s 7,000 employees because the National Company Law Tribunal (NCLT) accepted Go First’s voluntary insolvency petition.

This grants protection under a moratorium from recovery by lessors and lenders for the airline’s assets and leases.

The start of the Corporate Insolvency Resolution Process (CIRP) was ordered by a two-member NCLT panel made up of President Justice Ramalingam Sudhakar and L N Gupta, who also stated that an interim resolution specialist will take over the airline’s management immediately.

As per reports, the NCLT court chose Abhilash Lal to serve as the airline’s interim resolution specialist. It should be emphasised that the NCLT judgement has suspended the previous management of Go First.

To retain the standing of the airline, the suspended management has been instructed to provide the temporary resolution specialist with the help they need. The management of Go First has also been required to deposit Rs 5 crore with IRP in order to cover costs.

The Wadia group-owned airline placed an urgent request before the NCLT to grant its plea, claiming that lessors are acting quickly to seize the aircraft that make up its fleet.

The Directorate General of Civil Aviation (DGCA) has already been contacted by lessors to delist 45 of Go First’s fleet of 54 aircraft.

As instructed by the DGCA, Go First has paused ticket sales and cancelled all flights through May 12. The airline, which last week filed for insolvency, claimed that its financial issue was brought on by defective Pratt & Whitney engines, which forced the grounding of almost half of its Airbus A320neo fleet.

However, the US engine manufacturer described Go First’s assertion as “astonishing” and devoid of supporting data.