NCLT on Wednesday has granted relief to Go First after it admitted Go First's pleas for voluntary insolvency and has granted the airline protection under moratorium from recovery by lessors and lenders. The order further added that airline's flight operations will remain cancelled till May 19.
The National Company Law Tribunal has directed for the initiation of Corporate Insolvency Resolution Process (CIRP) and for the appointment of insolvency resolution process. Further it has asked the IRP to maintain status of the airline and pursue arbitration proceedings.
NCLT suspends management
In the order NCLT has suspended the earlier management of Go First and has asked the management to offer necessary support to the IRP. It has also directed the Go First management to deposit Rs 5 crore with IRP to meet expenses.
NCLT says no layoff
Additionally in order to offer relief to the employees of Go First the order states that no employees will be laid off.
Lessors will not be able to take back planes
The order by NCLT under the moratorium will prevent the lessors and lenders from taking back flights.
Concerns regarding supply of engine continue
The NCLT also added that the major concern for at the moment is the supply of engines from Pratt and Whitney.
Go First CEO calls it a historic judgement
Go First CEO Kaushik Khona, calls the decision a historic judgement and claims it will ensure that the airline remains viable as it still has 27 aircraft in operation.
Go First faces financial crunch
Go First, which has been flying for more than 17 years, stopped flights from May 3 amid financial crunch caused by grounding of more than half of its fleet due to non-availability of Pratt & Whitney engines.
With liabilities worth Rs 11,463 crore, the airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on its financial obligations.
Go First has already suspended the sale of tickets till May 15.
As many as 28 planes or more than half of the airline's fleet are grounded due to the non-supply of engines by Pratt & Whitney (P&W).
The lessors of the carrier have opposed Go First's plea for an interim moratorium contending that it would have "harmful and serious consequences".
Besides, Go First is facing two more petitions seeking insolvency proceedings against it.