Go First crisis LIVE updates: Airline seeks intervention from NCLT to retain aircraft, restraint DGCA from any action

Go First’s plea for voluntary insolvency proceedings is being heard by the National Company Law Tribunal (NCLT). The airline has blamed engine-maker Pratt & Whitney for its woes, and said that their faulty engines have resulted in the grounding of 50 per cent of its fleet. 

The airline’s CEO Kaushik Khona has said that it would not issue new tickets till at least May 15. It has, so far, cancelled flight tickets till May 5. 

Khona also had said in an interview with Reuters that the insolvency proceedings are an attempt to revive the operations, and not to sell it. He also said that the government is keen to not let the airline fail.

Also read: Go First crisis : NCLT to hear Go First’s insolvency plea on Thursday

Follow the updates of Go First at NCLT here: 

1:30 pm: The NCLT breaks for lunch. 

1:20 pm: Lessors have argued at the NCLT that this is not a case of "first day first show relief to be granted”.

1:15 pm: Lessors have objected to Go First's plea of a 'hurry' and urgent admission. They have reiterated that the moratorium will increase the CIRP costs or costs incurred by the resolution professional. 

1:03 pm: THE PLEA: The airline said in its application that Pratt & Whitney had provided guarantees under the purchase agreements to replace engines with 48 hours and repair failed engines free of cost. However, the engine-maker backed out from its commitments and is now demanding payments for its repairs. The airline said that Pratt & Whitney paid Rs 400 crore up to March 2020 after "recognising its failure". "However, it now refuses to recognise any claim for compensation," said Go First, adding that it has now been forced to move for emergency arbitration in Singapore. 

12:55 pm: JUST IN: Go First cancels its flights till May 9. In its earlier statement, the airline had said that the flights were cancelled for May 3, 4 and 5. 

12:52 pm: THE PLEA: Go First said that its expenses increased from Rs 2,250 crore in FY 2014-15 to Rs 5,907 crore in FY 2022-23.

12:48 pm: JUST IN: DGCA asks Go First to process the refunds of passengers who had booked tickets that were subsequently cancelled. Go First is expected to not issue new tickets till May 15. 

12:48 pm: THE PLEA: The airline said that it tried to stay afloat by seeking funds from banks and financial institutions under the Emergency Credit Line Guarantee Scheme (ECLGS) 3.0 by entering into deferral agreements with lessors for payment of lease rentals under the aircraft lease agreements. 

12:43 pm: THE PLEA: In its application, Go First said that what was "historically one of India's fastest growing airlines service providers" started facing losses and started operating with 50 per cent revenue while incurring 100 per cent cost. The deterioration of the financial performance was also accentuated by the COVID-19 outbreak that restricted air travel. 

12:40 pm: Lessors intervened and reiterated that there is no concept of interim moratorium under IBC. An interim moratorium would interfere with the contractual rights, they said. 

12:38 pm: NCLT asks Go First how an interim moratorium would help. 

Go First said that as the COC and IRP come together with the objective to keep the airline functional, they will be required to de-freeze the accounts. 

12:37 pm: THE PLEA: In its application to NCLT, Go First said that the grounding of planes had a "cascading effect on the business operations" of the airline. It said that 96 per cent of the fleet in FY2015 were available for flying, which reduced to 54 per cent in FY2023. As of March 1, 2023, 50 per cent of Pratt & Whitney engines were unavailable for flying, it said. 

12:31 pm: THE PLEA: Go First, in its application to NCLT said that Pratt & Whitney "supplied inherently defective engines" and "failed to provide requisite and satisfactory maintenance", leading to a breach of contract and the grounding of Go First's planes. 

12:26 pm: Go First has said that Indian Oil Corporation started invoking its bank guarantees last night. 

12:25 pm: NCLT asks Go First how one resolution professional will run the airline when so many professional could not. 

12:23 pm: Go First has sought Alvarez & Marsal to take over as IRP. They were also roped in by Jet Airways in 2015. 

12:22 pm: NCLT says that it if the engines are a cause of concern then the remaining fleet is also at the risk of being grounded. 

12:20 pm: NCLT to Go First: There is no provision under IBC for interim moratorium. Provision exists for absolute moratorium only in case NCLT admits the plea, said the tribunal. 

12:17 pm: Go First on interim moratorium: Go First said that if an interim moratorium is not granted then the aircraft will be seized, which would harm the further functioning of the airline. “The petition has justified all key requirements for an interim moratorium which are essential at this stage,” it said.

12:14 pm: Go First talks about jobs. "We have over 7,000 employees and 10,000 indirect jobs banking on our survival," it said. 

12:13 pm: Go First to NCLT: "The best thing in the current aviation sector situation should be revival of this airline." 

12:12 pm: Go First at NCLT: The airline said that an Insolvency Resolution Professional should be appointed for the turnaround of the carrier. 

12:09 pm: Lenders are moving to freeze accounts and terminate all arrangements with us. We see a huge scope of revival in Go First. Purpose of IBC is revival: Go First at NCLT

12:08 pm: Go First said that the company is in insolvency because of the engine supplier, and has not incurred any other financial misdoings 

12:04 pm: Go First said that 28 of their aircraft are currently grounded. It said that the promoter invested Rs 290 crore in April.  

12:00pm: Go First said that it is seeking intervention from NCLT as it aims to retain its aircraft. It wants the lessors to be restrained from taking back its aircraft and from DGCA to take any adverse action against Go First.