Go First Airlines Enters Liquidation After Failing to Secure Revival Plan
Go Airlines (India) Ltd, popularly known as Go First, has been officially admitted into liquidation by the National Company Law Tribunal (NCLT) in Delhi, marking the end of the airline’s turbulent journey. This decision comes after the airline’s lenders and resolution professionals failed to find any viable proposals to revive the airline’s operations, despite months of financial instability.
The liquidation order follows Go First’s severe financial troubles, which began when the Wadia Group, the airline’s promoter, filed for voluntary bankruptcy in May 2023. The Wadia Group’s decision was primarily driven by persistent delays in the delivery of aircraft engines from Pratt & Whitney, which grounded a large portion of Go First’s fleet, crippling its operations. This led to the airline being placed under the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC).
The NCLT ruling noted that the resolution plans presented by interested parties were neither compliant with IBC requirements nor commercially viable. As a result, the Committee of Creditors (CoC) unanimously chose liquidation over continuing the search for a feasible revival plan. The decision reflects the difficulty of restarting commercial operations under the airline’s financial strain. Go First’s liabilities are estimated at a staggering Rs 8,575 crore. This includes debts owed to prominent banks and financial institutions, such as Rs 1,934 crore to the Central Bank of India, Rs 1,744 crore to Bank of Baroda, and Rs 774 crore to IDBI Bank. Additionally, the airline owes significant amounts to unsecured creditors, including Rs 90.88 crore to Bombay Burmah Trading Corporation and Rs 1,330 crore to Leila Lands Ltd. Furthermore, Go First faces outstanding dues of Rs 75 crore to its employees.
The liquidation process will see the sale of Go First’s assets in an effort to settle these debts. Dinkar T. Venkatasubramanian has been appointed as the liquidator, and he will oversee the process in accordance with the guidelines issued by the Insolvency and Bankruptcy Board of India (IBBI). This event serves as a stark reminder of the challenges faced by low-cost carriers, especially in a competitive and high-cost industry like aviation. Go First’s failure to secure a revival plan highlights the complexities of operating in this sector, where the costs of aircraft maintenance, fuel, and operational expenses can overwhelm a company without solid financial backing. The liquidation of Go First marks a significant chapter in the ongoing struggles of the airline, which once had a strong presence in India’s aviation market. The airline’s downfall underscores the critical importance of effective financial management and operational efficiency in sustaining operations within a competitive and volatile industry. For the aviation sector, Go First’s closure serves as a cautionary tale, particularly for low-cost carriers operating under challenging economic conditions.
