The Go First insolvency is an alarming sign for the Indian aviation sector, which till last month was looking poised to service the country's air travel demand cruising past pre-pandemic levels. Hit by fixed costs of aircraft grounded due to engine shortage, as well as cost of lease, the carrier approached the National Company Law Tribunal for relief as it didn't have enough funds to continue.
After Go First was provided protection from repossession of airlines by the NCLT, one of its lessors has alleged that the carrier's move to block the action was fraudulent.
Wasn't allowed to respond
SMBC aviation has approached the National Company Law Appellate Tribunal, claiming that Go First doesn't have rights over the aircraft, since it doesn't own them.
Other lessors also want to file a response to NCLT's decision of initiating insolvency proceedings for Go First under Section 65 of the Insolvency and Bankruptcy Code.
The section deals with malicious initiation of the process, but SMBC's lawyer said that they were denied the opportunity to use it.
Aircraft stuck with Go First
He further claimed that the lease with Go First was terminated before the insolvency, but SMBC wasn't allowed to show it.
The petition was filed hours after the NCLT initiated Go First's insolvency proceedings, hence protecting its aircraft from being repossessed by lessors.
There were also reports that Air India and Indigo were showing interest in leasing the aircraft which Go First couldn't operate and pay for.
