The National Company Law Tribunal (NCLT) on Wednesday admitted Go Airlines’ plea for voluntary insolvency and granted protection under moratorium from adverse actions by lessors, lenders, regulator, airports and oil companies.
The NCLT has appointed Abhilash Lal from Alvarez & Marsal as the Interim Resolution Professional (IRP) and directed initiation of Corporate Insolvency Resolution Process for the carrier that operates under the Go First brand.
“The IRP will ensure to take all necessary steps including the execution of the arbitral award to keep the corporate debtor (Go First) as a going concern and run its services smoothly,” the tribunal ruled. It added that the IRP must also ensure that no employees were laid off.
SMBC Aviation Capital, which has leased at least seven aircraft to Go First, moved the National Company Appellate Law Tribunal to challenge the order. Lessors have already terminated lease agreements for 45 of the carrier’s 54 aircraft and have requested the DGCA to deregister the aircraft. They contend that the moratorium cannot be enforced retrospectively. Also, 26 aircraft had already been grounded following issues with their Pratt & Whitney engines.
The NCLT has restrained all lessors and creditors from taking steps either to recover dues or terminating aircraft leases or requiring the airline to ground aircraft in its possession. It has also restrained the DGCA from accepting any ‘Irrevocable Deregistration and Export Request Authorisation’ applications from any lessors. The regulator as well as airports have been barred from withdrawing airport slots granted to the airline. Suppliers of aviation turbine fuel have also been ordered not to terminate fuel supply.
Meanwhile, in a market faced with pilot shortages, Air India is learnt to be in the process of hiring 350 pilots from the bankrupt airline. About 50 offer letters have already been issued, a senior Air India official, who spoke on condition of anonymity, confirmed. Almost 50-100 pilots are set to join IndiGo, and another 50 may join Akasa, said sources among Go First pilots. The airline had a total of 650 pilots when it filed for insolvency, including 300 captains and 350 first officers.
The airline had announced cancellation of flights till May 19, and the DGCA had barred it from selling air tickets.
