India’s National Company Law Tribunal (NCLT) reversed its order on Go First plea to begin insolvency resolution proceedings. This comes even as the airline extended its flight cancellations till May 9. India’s NCLT reverses plea Go First to start insolvency.
In a statement issued on May 2, the airline said it had to take this step due to the ever-increasing number of failing engines supplied by Pratt & Whitney. This has resulted in the grounding of 25 aircraft (equivalent to 50 percent of its Airbus A320neo aircraft fleet) as of 1 May.
At that time, Go First canceled flights for May 3 and 4. NCLT is a quasi-judicial body in India adjudicating issues relating to Indian companies. The airline filed for insolvency protection and sought an interim moratorium on its financial obligations and a restrain for lessors to stop them from repossessing planes.
Lessors are trying to repossess aircraft.
Meanwhile, The Economic Times reported that at least eight leasing companies approached the aviation regulator seeking the planes they had leased to the now-grounded airline. The newspaper reported that CDB Aviation, SMBC Aviation Capital, and the Sonoran Aviation Company had approached the Directorate General of Civil Aviation (DGCA) to deregister 20 Airbus A320neo aircraft. Out of the 20, 15 were operating for the airline until 2 May midnight when it grounded its operations.
DGCA has also asked the grounded airline to refund passengers for canceled flights. The refund amount owed to passengers is estimated to be around Rs 3.500 million.
Go First ceased operations days after the Union Civil Aviation Ministry tweeted that on April 30, 4.6 million passengers flew on 2.978 domestic flights, saying that Indian domestic aviation travel had hit a new high surpassing the pre-Covid daily average flights.
Domestic fares go up.
Go First is the third largest airline in the country, and its decision to cease operations has seen not only capacity being sucked out of the domestic and international markets but has also led to rising domestic airfares.
In March this year, Go First got approval to operate 1.538 weekly departures this summer, 10 percent more than the ongoing winter season but almost 40 percent less than the previous summer schedule. The allotment of 1.538 weekly, or almost 7 percent of the 22.907 weekly departures approved by the authorities for the ongoing summer season, meant that Go First could operate that many weekly flights. How many it actually operated depending on several factors like demand and financial viability of operating these flights.
The airline operated 27 domestic and seven international destinations, including Delhi, Mumbai, Pune, and Guwahati in India and Kuwait, Abu Dhabi, Muscat, and Dubai internationally.