NCLT approves bankruptcy petition of Go First: aircraft leasing firms will not be able to take back their planes, flights canceled till May 19
The bankruptcy petition of Go First has been accepted by the National Company Law Tribunal ie NCLT. The NCLT, while hearing the petition of the airline on May 4, had reserved the verdict. NCLT has also accepted the demand for Moratorium while giving relief to the airline.
Moratorium means creditors cannot take any legal action in case of any loan. Aircraft leasing firms will not be able to take back their planes. No employee will be retrenched as per the order of the Tribunal. The management has also been taken over.
A two-member bench of Justices Ramalingam Sudhakar and LN Gupta appointed Abhilash Lal as Interim Resolution Professional (IRP) to run the debt-ridden company. He will take over the management to revive the airline. The suspended board of Go First will also have to deposit Rs 5 crore for regular expenses.
This is the first time that an Indian airline has sought bankruptcy protection on its own to renegotiate its contracts and debts. Earlier on Monday, aviation regulator DGCA had issued a notice to GoFirst seeking a reply within 15 days. This notice was given on failure to continue the operation.
The CEO of Go First called it a historic decision.
Kaushik Khona, CEO of GoFirst, described the NCLT verdict as historic in terms of speed of proceedings. This will ensure that the airline continues to operate. He said the airline still has 27 aircraft in operation. NCLT’s moratorium order will prevent lessors (aircraft lessors) from taking back the aircraft.
All flights suspended till May 19
The airline first canceled its flights for May 3, 4 and 5. After this, the flight suspension was extended till 9 May. Then it was done on 12th May. Now it has been suspended till May 19. He doesn’t even have money to fill fuel.
According to GoFirst’s website, the airline once operated more than 200 flights daily to 27 domestic and 8 international destinations.
The airline will refund the ticket money to passengers
The DGCA, showing a tough stance, has asked the passengers to return their money immediately after the flights are cancelled. The airline has also talked about refunding the money for the tickets. Refund will be done through original payment mode. Means, those who have paid for the ticket through credit card, the refund will appear in their credit card statement. On the other hand, those who have paid through UPI and Net Banking will get the refund directly in their account.
