From just another Indian airline gliding towards a post-pandemic recovery as more flyers booked flights for the summer, Go First nosedived towards insolvency in a matter of days. The National Company Law Tribunal has admitted its plea and appointed a resolution professional, much to the displeasure of lessors.
Now the IRP Abhilash Lal has informed the NCLT that the airline has accumulated disproportionate liabilities towards lessors of its aircraft and others.
Grounded fleet added to burden
According to him, the airline's liabilities increased by as much as Rs 3,500 crore in just one year because its aircraft were grounded due to a shortage of engines.
Currently Go First's dues to be paid to financial as well as operational creditors has reached Rs 11,463 crore, although it is not at default with any of them.
He added that the firm operating at limited capacity doesn't have enough money to pay the costs and also handle the devolvement of stand-by letters of credit and bank guarantees, that creditors may invoke.
Lessors posed a risk
The airline could also have been bogged down by lessors pulling out their aircraft from its fleet, had it not filed for voluntary insolvency.
The resolution professional has asked the staff to get to work for raising funds as soon as possible to restart operations at the airline.
