Go First at NCLT: 'Not a for case for first day, first show relief,' say aircraft lessors

Go First moves NCLT:  Aircraft lessors on Thursday told the Delhi Bench of National Company Law Tribunal (NCLT) that they have serious objections to the demand for interim moratorium by Go First airline, controlled by Wadia Group, and said that the moratorium will have harmful and serious consequences going ahead. 

"Not a case for first day, first show relief to be granted," lessors told the NCLT bench led by Justice Ramalingam Sudhakar, adding that they have terminated the leases and are entitled to get the aircraft back. There have been multiple defaults by Go First for maintenance and other expenses, lessors said. 

On Tuesday, Go First airline moved the NCLT where it has filed an application under Section 10 of Insolvency and Bankruptcy Code, 2016. The airline has blamed engine-maker Pratt & Whitney for its fresh troubles and said that their faulty engines have resulted in the grounding of 50 per cent of its fleet. 

During its Thursday hearing before the NCLT Delhi bench, the airline company sought an interim moratorium in resolving the issues. It has also sought various interim directions from the tribunal, including restraining lessors from taking back aircraft and regulator DGCA from taking any adverse action against the airline.

Go First Airlines' legal counsel on Thursday said that the purpose of filing for voluntary insolvency is to revive the airlines. The carrier told the tribunal that it is seeking a comprehensive debt restructuring and that it is not a malicious petition to avoid payments of dues. 

In its reply, the tribunal said that there is no provision for an interim moratorium under the Insolvency and Bankruptcy Code (IBC). 

Following which, aircraft lessors too opposed the demand of interim moratorium by Go First. Lessors questioned how the Insolvency Resolution professional (IR) would run the company and cited Jet's example of how it "has gone down the drain." 

“What is the tearing hurry, GoAir is seeking relief just because they have filed... GoAir is an entity with the deepest possible pockets, we all know who they are,” they said.  

The lessors further added if moratorium relief is granted to Go First, they won’t be able to take back their grounded aircraft. The grounded aircraft can't fly either due to cancelled flights, which will only add to the CIRP cost. 

The aircraft lessors further said that there is no concept of interim moratorium under IBC set up by the Centre, even the Parliament has not made any such provision. 

They said that if Go First is granted an interim moratorium that would restrain third parties like them from enforcing contractual rights. “Such an order placing conditions on third parties not before NCLT, would be impressible under law,” they told NCLT on Thursday. 

Process refunds, DGCA to Go First

Civil aviation regulator DGCA on Thursday told Go First to process refunds to all those passengers who already booked their tickets.  The Wadia Group-owned airline had cancelled all its flights till May 15 and is working to refund or reschedule for future dates, as per a fresh notice. 

On the other hand, the airline took to its official Twitter handle and informed passengers that it is cancelling all its flights scheduled till May 9. Go First also said that it will issue a full refund to passengers.

Go First said: "We regret to inform that due to operational reasons, Go First flights scheduled till May 9, 2023, have been cancelled. We apologise for the inconvenience caused by the flight cancellations. A full refund will be issued to the original mode of payment shortly".

Also read: Go First crisis: DGCA asks cash-strapped airline to process refunds to passengers

Also read: Go First's sorry tale of submissions to NCLT: All financial resources exhausted, 7,000 jobs at risk, Rs 208 crore to pay staff

Also read: Go First dues: IOCL invokes Rs 500-crore bank guarantee by airline, current dues at Rs 50 crore