
In a significant development within India's aviation sector, the National Company Law Tribunal (NCLT) has ordered the liquidation of Go First Airlines, marking the end of the budget carrier's struggle to stay aloft amidst financial turmoil. The decision, announced on January 20, 2025, concludes months of insolvency proceedings that began in May 2023 when the airline, formerly known as GoAir, sought bankruptcy protection. Go First, owned by the Wadia Group, had been grappling with severe financial distress, primarily attributed to issues with its fleet of Airbus A320neo aircraft, which were grounded due to engine problems supplied by Pratt & Whitney. These operational setbacks led to the airline's inability to service its debts, prompting the initial filing for insolvency under India's Insolvency and Bankruptcy Code (IBC).
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The liquidation order came after a request from Go First's lenders, who had rejected bids for the revival of the airline. This move to liquidate was based on the unanimous decision by the Committee of Creditors (CoC), which includes major financial institutions like the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank. Go First had accumulated debts amounting to 65.21 billion INR (approximately $781.14 million), with significant liabilities to these creditors, aircraft lessors, vendors, and customers. The NCLT's order to liquidate the company was not taken lightly. The tribunal noted that the CoC had the commercial wisdom to decide on liquidation, and with 100% voting in favor, there was little legal or practical basis for interference by the adjudicating authority. The decision underscores the dire financial state of Go First, where despite receiving two financial bids during the bankruptcy process, the airline's future was deemed unviable.
The liquidation process will now see the appointment of a liquidator, Dinkar Tiruvannadapuram Venkatasubramanian, who will be responsible for managing Go First's assets, which include a valuable 94-acre land parcel in Thane, pledged to banks. The liquidator's primary task will be to monetize these assets to settle the airline's vast liabilities. This includes debts not only to financial creditors but also to aircraft lessors who have been locked in legal disputes with Go First over the repossession of their planes, which were blocked by a court-imposed moratorium. The grounding of Go First's fleet began in early 2023, with more than half of its 54 aircraft being repossessed by leasing firms by the end of that year. The DGCA deregistered all of Go First's aircraft in May 2024 after a Delhi High Court order, effectively sealing the airline's operational fate. Without aircraft and amidst mounting financial troubles, the airline's prospects for revival diminished significantly.
This liquidation is a stark reminder of the challenges within India's airline industry, where high operational costs, fierce competition, and external factors like supply chain issues for aircraft parts can lead to financial ruin. Go First joins a list of airlines like Jet Airways, which also faced liquidation after insolvency proceedings failed to revive it. The news of Go First's liquidation has broader implications for India's aviation landscape, potentially affecting airfare, routes, and competition. The airline's exit from the market could lead to a temporary reduction in capacity, pushing up prices on routes where Go First had a significant presence. However, it also opens up opportunities for other airlines to expand their operations, possibly leading to new market dynamics in the Indian aviation sector. As Go First winds down, the focus now shifts to how the liquidation will be managed, how long it will take to settle all claims, and what lessons airlines, creditors, and regulators can learn from this episode to prevent similar crises in the future.