The National Company Law Tribunal (NCLT) has ordered the liquidation of Go First Airways after approving an application from the airline’s Committee of Creditors (CoC).This decision comes as the carrier faces severe financial challenges, marking the end of its operations.
Go First Airways, a budget airline, faced a major setback when the National Company Law Tribunal (NCLT) ordered its liquidation on Monday. This decision followed months of severe financial challenges and a voluntary insolvency resolution process initiated by the airline in May 2023. The Committee of Creditors (CoC) had requested the liquidation, marking a pivotal moment in the airline’s struggle. The liquidation order comes after the airline’s failure to recover its financial stability, with mounting debts and no viable asset to revitalize its operations. This decision brings a definitive end to the airline’s operations.
Go First Airways Liquidation: CoC’s Plea and Aircraft Repossession Surge
In September 2024, the Committee sought the liquidation of Go First Airways due to the airline losing its entire fleet and lacking a viable recovery plan. By December 2024, the situation had worsened, with lessors repossessing more than half of the airline’s 54 planes. The accelerated return of aircraft underscored the dire financial crisis faced by the carrier, drastically reducing its operational capacity. This turn of events sealed the airline’s fate, making its revival unfeasible despite earlier attempts to salvage operations.
Key Financial Struggles and Impact
- Go First Airways owes Rs 11,000 crore, including debts to banks, lessors, vendors, and customers.
- The airline borrowed Rs 1,292 crore under the Covid emergency credit scheme.
- Go First ceased operations on May 2, 2023, and filed for voluntary insolvency shortly after.
- The NCLT’s decision to liquidate follows mounting financial challenges with no viable recovery options.
- Key remaining assets include a 94-acre land parcel in Thane.
Go First Airways, once a prominent player in India’s aviation sector, faces liquidation after accumulating liabilities of around Rs 11,000 crore. With debts to banks, lessors, vendors, and customers, the airline’s financial struggles culminated in its bankruptcy. The NCLT’s ruling on its voluntary insolvency process paves the way for the airline’s assets to be liquidated, including a valuable land parcel in Thane.
Court Orders Fleet Deregistration as Airline Faces Financial Ruin
Go First Airways, once a significant player in India’s aviation industry with a 6.9% market share, has been pushed into liquidation as its financial difficulties reached an insurmountable point. The airline’s operations were dealt a severe blow when the Delhi High Court ordered the deregistration of its entire fleet of 54 aircraft in April 2023, allowing lessors to reclaim their assets. With mounting debts and no viable recovery strategy, the airline’s collapse has had a ripple effect on the industry, leaving creditors, employees, and customers facing the consequences of its bankruptcy.
Go First Follows Jet Airways into Liquidation as India’s Insolvency Process Claims Another Major Airline
Go First Airways has become the second major airline to face liquidation under India’s insolvency process, following the example set by Jet Airways. In November 2024, Jet Airways was ordered to liquidate after its resolution plan was deemed unworkable. Similarly, Go First filed for liquidation in September 2023, citing a lack of viable assets and a feasible revival plan. This move underscores the mounting financial distress within India’s aviation sector and highlights the challenges faced by airlines struggling with insolvency.
Go First’s Supply Chain Crisis and Flight Suspension: Scindia’s Statement on NCLT Filing
On May 2, 2023,the then Civil Aviation Minister Jyotiraditya Scindia addressed Go First’s ongoing operational crisis, which has been exacerbated by engine shortages. Despite government efforts and collaboration with stakeholders, the airline’s financial position deteriorated, leading to its application for NCLT proceedings. Scindia highlighted the need to respect the judicial process while urging the DGCA to ensure Go First provides alternative arrangements for passengers affected by sudden flight suspensions. This marks a significant moment in the airline’s struggles.
Go First Airways’ journey ended with the National Company Law Tribunal (NCLT) ordering its liquidation after a series of financial setbacks. Despite efforts to resolve insolvency, the airline’s mounting debts and repossession of aircraft rendered any revival impossible. The airline’s financial collapse highlights the challenges faced by struggling carriers in India’s competitive aviation market, especially budget airlines. This move signals a significant shift in the industry, raising concerns about the future stability of other low-cost carriers in the region.
