NCLT allows Go First plea seeking insolvency

Indian low-cost carrier Go First, which has been grounded after declaring bankruptcy, has found some relief in the recent NCLT Tribunal hearing.

The court has allowed the airline to enter into an insolvency process and has given immunity against the registration of any aircraft by its lessors.

Protection of moratorium

The court has also asked the suspended board members to follow the Interim Resolution Professional (IRP), and has also asked the airline to ensure that no layoffs take place during this period of time.

This comes after the Indian aviation regulator DGCA issued a notice to the airline, asking it to immediately suspend the taking of new flight bookings until a proper resolution is found.

The court has put the company under the protection of moratorium and asked the management to deposit Rs 10crore to the IRP.

But certain reports have also been indicating that the lessor has no plans to challenge the decision in the higher NCLT court, as they want to re-process their aircraft.

After having flown for almost 17 years, Go First has always been neither in college profits nor in complete loss; the airlines main assets being the slots in metro cites of India.

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This is a market sector both Air India and IndiGo are competing for, and both the airlines were even in talk with lessors of Go First to strike a deal to take the carriers grounded aircraft into their fleet.

With supply chain issues looming over the entire industry, this is the chance that no airline would want to let go.

With Go First’s operating base being Mumbai, the airline has a fair amount of slots here, and that is what the industry leading airlines want to bank upon.

Effect of flight suspensions

The sudden decision of Go First to cease its flying operations resulted in sky rocketing airfares. Go First had a decent share of flights operating from Delhi to cities like Jammu, Srinagar, and Ladakh.

With this being the summer calendar, many tourists on their holiday were stranded with no proper road or rail connection, and with airfare as high as ₹19,900 (without tax), people had no choice but to wait.

Air India recently conducted walk-in interviews for captains, which was mainly aimed at hiring the Go First pilots after the airline ticket declared bankruptcy.

This was a good opportunity for industry leaders like Indigo and Air India, as the Indian aviation industry went from having pilot shortage to surplus of pilots.

With Air India’s recent aircraft mega order, they need pilots more than any other airline to make it a success.

A recent report published by The Economic times suggests that after the NCLT gave its order, the airline is now planning to start its operations from 23 Ma, 2023, a source close to this development was quoted.

Initially, the airline plans to start its operation with a reduce number of flights; probably from the key airports which will help the airline save slots, as well as optimising passenger capacity.

Only the coming days will tell how things will transpire, and whether the airline will ever take back to skies.