NCTL Agrees To Hear Go First's Voluntary Insolvency Plea On Thursday

The National Company Law Tribunal (NCLT) has granted a hearing for Go First's voluntary insolvency plea on May 4.

The National Company Law Tribunal's Mumbai bench has received a voluntary insolvency petition from GoFirst, the low-cost carrier controlled by the Wadia group.

On Wednesday, the airline's lawyer mentioned the plea before the NCLT and requested an urgent listing date, which the tribunal agreed to accordingly. GoFirst's financial woes are due to the grounding of 50% of its fleet, and the airline has blamed this on the "faulty engines" provided by US company Pratt & Whitney. The airline has said it can no longer continue to meet its financial obligations and has filed for insolvency resolution.

Go First announced on Tuesday that it was "forced" to seek resolution and protection under Section 10 of IBC by applying to the National Company Law Tribunal Delhi due to the increasing failure of Pratt and Whitney engines that power its fleet. The airline also said that it will temporarily suspend flight operations on May 3 and 4 due to a "severe fund crunch" but flights will resume once the NCLT admits the application. The airline has filed a case in Delaware federal court against the US-based engine manufacturer, seeking implementation of an arbitration ruling that ordered PW to supply the airline with engines, failing which the carrier could be forced to cease operations.

The lack of engines from Pratt & Whitney (P&W) has forced the airline to ground 28 aircraft, or more than half of its fleet. The airline claims that the arbitrator ordered P&W to deliver at least 10 operational spare leased engines by April 27 and an additional 10 operational spare leased engines each month until December 2023.

According to the statement, the airline's management has been attempting to persuade P&W to provide spareengines and repair engines for more than a year. The CEO added that P&W shifted Emergency Arbitration to Singapore but has been stalling the proceedings.

The airline has stated that its insolvency petition does not call for the sale of the company, and the promoter Wadia group is not considering leaving the carrier. Thousands of jobs are also in line, in addition to worries about the health of the institutions.