Go First Airlines | Business Upturn

Go First faces uncertainty as NCLT grants 90 day extension in insolvency proceedings

Mahita Jain — Thu, 23 Nov 2023 08:10:12 +0000

The National Company Law Tribunal (NCLT) has granted a 90-day extension to the Corporate Insolvency Resolution Process (CIRP) of Go First, the grounded airline, beginning from November 6, 2023, and concluding on February 4, 2024. The decision instructs Go First to present an action plan within this timeframe, emphasizing the critical need for completing the resolution process. Failure to do so could lead to the initiation of the company’s liquidation by the tribunal.

The extension comes as the latest development in Go First’s insolvency proceedings, which began when the airline voluntarily filed for CIRP on May 2, 2023, under Section 10. Subsequently, on May 10, the NCLT admitted the insolvency plea and appointed a Resolution Professional (RP) to manage the company’s affairs.

During the proceedings, Go First’s RP informed the NCLT that there is one prospective bidder for the airline. However, as of the November 21 deadline, the bidder had not submitted the resolution plan. The RP asserted that the Committee of Creditors (CoC) is reassessing the next steps for the airline, and the CoC unanimously passed a resolution to seek the 90-day extension.

According to the Insolvency and Bankruptcy Code (IBC) of 2016, the resolution process must ideally be completed within 180 days. However, the NCLT can extend this period up to a maximum of 330 days. If a resolution is not reached within this extended timeframe, the NCLT is obligated to order the liquidation of the company. By February 4, 2024, Go First would have been under the resolution process for 270 days.The DGCA clarified that the rule exempting aircraft leases from the moratorium, which stops legal actions, should also apply to cases that were already in progress, not just new ones. This added a layer of complexity to Go First’s already challenging situation.

Go First asked to submit status report of all leased aircrafts

News Desk — Sat, 02 Sep 2023 05:54:10 +0000

On August 7, 2023, the Supreme Court went against the decision of the Go First appeal against the order of the High Court, allowing for the aircraft inspections. The court mentioned that it would not intervene in the proceedings of the Delhi High Court. On July 12, the High Court permitted lessors to inspect 30 aircraft. The airline has a fleet of 56 aircraft, which are on lease. The aircraft lessor who leased their aircraft to Go First filed a writ with the Delhi High Court to release their aircraft leased to the airline.

On May 10, the airline filed a plea for Insolvency with the National Company Law Tribunal(NCLT). The tribunal has accepted the plea and initiated the process by appointing the Insolvency Resolution Professional(IRP). The High Court has directed the airline not to remove or replace aircraft parts without the lessor’s permission. While the High Court has directed the lessor to continue the inspection, the NCLT tribunal has not given the permission. Given this, the National Company Appellate Tribunal(NCLAT) has modified the NCLT decision and granted the engine lessor to inspect the engines leased out to the Go First airline. The tribunal recently asked the airline to submit a maintenance report of all leased aircraft. The court has also ordered to comply with its order dated 4th August, which has similar requirements. Throughout this process, the appointed Resolution Professional(RP) blamed the lessor for not maintaining the aircraft and keeping it in good condition.

Go First Case: another lessor moves NCLAT against order permitting airlines to use aircraft

Adesh Dixit — Tue, 29 Aug 2023 13:11:50 +0000

A challenge to the National Company Law Tribunal’s (NCLT) judgment allowing the grounded airline Go First to operate leased aircraft has been filed by Jackson Square Aviation Ireland Ltd with the National Company Law Appellate Tribunal (NCLAT).

After Engine Lease Finance BV, Jackson is the second lessor to contact the appellate tribunal. On August 18, the NCLAT modified the NCLT’s order from July 26 to allow the engine lessor to check the four engines that were leased to Go First.

The tribunal is anticipated to hear the lessor’s appeal, which was listed at the registrar’s court today, during the upcoming week. The Registrar’s Court is in charge of examining the legal compliance of the pleadings submitted by the plaintiffs.

On July 26, the NCLT declined to impose restrictions on Go First’s use of leased aircraft for its operations, citing the importance of such aircraft to Go First’s ability to continue as a going concern.

The DGCA has not deregistered the aircraft, which implies that Go First can utilize them to restart operations, according to the tribunal’s order. Therefore, as long as the aircraft/engines are registered, they may be utilized for operating or flying to maintain Go First as a going concern, as long as they do so in accordance with the security measures and safety standards established by the regulators.

The NCLT denied the lessors’ request to inspect their aircraft and engines and ruled that the Resolution Professional (RP) had previously been instructed to uphold that directive in a previous order from June 15 when it was issued. The tribunal has only provided relief to the lessors insofar as the RP has taken care of the aircraft and engines’ protection and upkeep.

NCLAT allows Go First lessor to inspect grounded aircrafts

Adesh Dixit — Fri, 18 Aug 2023 11:03:50 +0000

On Friday, the National Company Law Appellate Tribunal (NCLAT) granted Engine Lease Finance BV permission to examine the four parked engines it had leased to Go First Airline, a grounded airline.

In this ruling, the NCLT modified its order from July 26 that allowed Go First to utilize the leased aircraft and stated that it did not agree with the NCLT order’s provision prohibiting the engine lessor from examining the engines.

The NCLAT directed NCLT to resolve the situation as soon as possible. The resolution professional (RP) was also ordered by the court to give an inspection date within 10 days.

Anandh Venkatramani, the attorney for the engine lessor, indicated during the court that RP had written to them on June 5, 2023, informing them that they would permit engine inspection, but that RP had taken no action.

Venkatramani stressed the significance of inspecting the sophisticated and essential engines, each of which is worth $15 million. The engine lessor contended that it ought to be given the same treatment as aircraft lessors, who were permitted by the single bench of the Delhi High Court to check their parked aircraft.

Senior attorney Ramji Srinivasan responded by asking the court not to get involved in the NCLT proceedings since the ultimate ruling in the matter is anticipated on September 1. Go First’s motion was denied by NCLAT, who ruled that engine check must be permitted.

The Directorate General of Civil Aviation (DGCA) had not deregistered the aircraft, indicating their readiness for operations, and NCLT had granted Go First permission to utilize them and resume operations in July.

Daily hearings for the deregistration case brought by the aircraft lessors are taking place in front of the Delhi High Court’s single bench. Lessors are now able to inspect parked aircraft because the Supreme Court and the high court’s division bench upheld the single bench’s decision.

According to a previous Mint story, a Delhi High Court judgment has prevented Go First RP Shailendra Ajmera from raising money even though he has received license from the aviation authority DGCA.

In order to meet its insurance and other legal responsibilities, the airline has applied to the CoC for an emergency infusion of Rs. 100 crore.

Go First, formerly owned by the Wadia Group, filed for bankruptcy blaming Pratt & Whitney’s defective engines for its financial problems. On May 10, NCLT acknowledged the issue, suspended the board, and put a hold on the airline’s financial commitments.

A number of Go First aircraft lessors, including SMBC Aviation Capital, SFV Aircraft Holdings, and GY Aviation Lease, argued that they should be permitted to reclaim their leased aircraft as a result of the moratorium but NCLAT rejected their request to stay NCLT proceedings.

Later, lessors including Pembroke Aircraft Leasing 11 Ltd, SMBC Aviation Capital Ltd, Accipiter Investments Aircraft 2 Ltd, EOS Aviation 12 (Ireland) Ltd, SFV Aircraft Holdings IRE 9 DAC Ltd, ACG Aircraft Leasing Ireland Ltd, and DAE SY 22 13 Ireland Designated Activity Company approached the Delhi High Court and requested that the aircraft that had been leased to Go First be deregistered.

Here’s why nearly 150 Go First employees are set to resign in the next 2 weeks

Kashvi Basu — Wed, 16 Aug 2023 15:44:29 +0000

Previously grounded airline, Go First has been trying its level best to restart its operation but it faces another challenge to retain its employees as majority of the staff have planned to resign as the their salaries are either insufficient or not paid at all.

The employees have ceased to receive their salaries since the last three months of May, June, July. The employees have already started to look for jobs in other areas. According to senior executive of Go First, around 150 employees which includes 30 pilots and 50 cabin crew members as well are planning to resign in the next two weeks . The cash-strapped airline has been struggling to raise funds since posting its biggest annual loss in the fiscal year of 2022. Meanwhile, with a moratorium in force on financial obligations and transfer of assets of Go First at the rise of the insolvency resolution proceedings, the lessors are unable to deregister and take back the aircraft leased to the carrier. The lessors had earlier told the high court that denial of deregistration by the DGCA was “illegitimate”. The NCLT had on May 10 initially allowed the voluntary insolvency resolution plea of Go First. On May 22, the NCLAT upheld the order of the Delhi-based principal bench of NCLT, which had admitted the plea of Go First to initiate voluntary insolvency resolution proceedings, and appointed the IRP to suspend the company’s board.

As an after effect, several lessors had then approached aviation regulator DGCA for deregistration and repossession of 45 planes they had leased to the carrier. Go First had stopped flying from May 3rd of this year.

DGCA asked to de-register 54 aircrafts leased to Go First: MoS Civil Aviation

Adesh Dixit — Mon, 24 Jul 2023 14:18:49 +0000

According to state minister of civil aviation Gen V K Singh (Retd), the Directorate General of Civil Aviation (DGCA) has received requests from lessors to deregister a total of 54 aircraft that were leased to Go First.

The DGCA’s processing of the applications is contingent on how the cases before the National Company Law Tribunal, Delhi, and the High Court of Delhi turn out.

Go First, a Mumbai-based airline that ceased operations on May 3, has cancelled all of its flights through July 25 while going through an insolvency resolution procedure.

On Friday, the DGCA announced that it had authorized Go First’s proposal to resume operations with 15 aircraft and 114 daily flights, subject to a number of requirements, including the availability of the necessary emergency finance.

The airline’s resume plan, which calls for operating 15 aircraft and 114 daily flights, has been examined and approved, according to an announcement from the Directorate General of Civil Aviation (DGCA).

“The acceptance is subject to the outcome of the writ petitions/applications pending before the Hon’ble High Court of Delhi & Hon’ble NCLT, Delhi,” it stated.

As part of the airline’s protracted insolvency, Go Airlines (India) Ltd has so far received claims totaling 240 billion rupees ($2.9 billion) from operational and financial creditors, according to Reuters.

The procedure complies with legal standards, which give every creditor a right to payment and recourse by submitting claims if a business is bankrupt. The resolution specialist will investigate the validity of the claims when they are filed.

According to a banker with a state-run bank who has exposure to Go Airlines, “Claims from the lenders are around 50 billion rupees, while lessors’ claims amount to 180 billion rupees so far,” after a meeting of the committee of creditors on Friday.

According to the email, Go First airline won’t be able to accept reservations for its flights until the DGCA has approved its flight schedule.

On June 28, the airline’s Resolution Professional (RP) sent the restart plan to DGCA, who then performed a special examination of the carrier’s Mumbai and Delhi facilities.

In order to speed up the sale process, Go First Resolution Professional invited expressions of interest (EOI) from potential owners for the airline on July 10.

A public announcement states that the EoI submission deadline is August 9 and that the final list of prospective resolution applicants will be released on August 19.