The National Company Law Tribunal (NCLT) on Wednesday admitted Go First’s 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 Go First.
“The IRP will ensure to take all necessary steps including the execution of the Arbitral Award to keep the Corporate Debtor (i.e Go First) as a going concern and run its services smoothly,” said the order. It added that the IRP must also ensure that retrenchment of employees is not resorted to.
SMBC Aviation Capital which has leased at least seven aircraft to Go First moved National Company Appellate Law Tribunal to challenge the order. Lessors have already terminated lease agreements for 45 of the total 54 aircraft in GoFirst’s fleet and have requested the DGCA to de-register the aircraft. They maintain that the moratorium can’t be enforced retrospectively. 26 aircraft were already grounded due to issues facing Pratt & Whitney engines.
The court has restrained all lessors and creditors from taking steps either to recover dues or terminating aircraft lease or requiring the airline to ground aircraft in its possession. It has also restrained the DGCA from accepting any ‘Irrevocable De-Registration 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 shortage Air India is learnt to be in the process of hiring 350 GoFirst pilots, out of which 50 have been issued offer letters, a senior Air India official confirmed. Nearly 50-100 pilots are set to join IndiGo, and another 50 will be joining Akasa, said sources among GoFirst pilots. The airline had a total of 650 pilots, which included 300 captains and 350 first officers.
The airline had announced cancellation of flights till May 19, and the DGCA has barred it from selling air tickets.