In a big relief for Go First, the National Company Law Tribunal (NCLT) on Wednesday refused to restrain the airline from operating aircraft owned by various lessors.
The tribunal observed that the planes were essential to ensure that Go First remained a going concern and pointed out that the Directorate General of Civil Aviation (DGCA) has not deregistered the aircraft.
A group of lessors had appealed to the tribunal asking they be allowed to take back the planes leased to Go First. However, the tribunal also dismissed a plea by the lessors who had asked they be allowed to inspect their aircraft and engines.
The NCLT held that it had, in an earlier order, directed the Resolution Professional to maintain the aircraft.
“… It is pertinent to mention that the DGCA has not deregistered the aircraft, which means that they are available to the ‘Corporate Debtor’ for use to resume operations. Therefore, as long as the aircrafts or engines are registered, they can be used for operating or flying to keep the ‘Corporate Debtor’ as a going concern, however, within the safeguards or safety norms prescribed by the regulators,” the two-member bench observed in its order.
The tribunal’s order comes at a time when Go First is preparing to restart scheduled services. Last week, the airline received a conditional approval from the DGCA to resume operations with 15 aircraft and 114 daily flights.
The NCLT, however, granted the lessors relief to the extent of “protection and maintenance” of the aircraft and engines by the Resolution Professional.
Go First, which filed for voluntary insolvency on May 3, has a total liability of Rs 11,463 crore. Of this, bank dues account for Rs 6,521 crore (Rs 1,300 crore has been drawn down under the government’s emergency credit line guarantee scheme). It has committed a default of Rs 2,660 crore toward aircraft lessors and Rs 1,202 crore towards its vendors.
Among the lessors that filed applications were Bluesky 31 leasing Co. Ltd, Bluesky 19 leasing Co. Ltd, Jackson Square Aviation Ireland Limited, SMBC Afro Engine Lease B, Engine Lease Finance BV and BOC Aviation (Ireland) Limited.
On May 22, the National Company Law Appellate Tribunal (NCLAT) upheld the National Company Law Tribunal’s (NCLT) order to admit Go First’s plea for insolvency.
On May 10, the principal bench of the NCLT in Delhi accepted Go First’s voluntary plea to initiate an insolvency resolution process. As a result, the tribunal appointed an Insolvency Resolution Professional (IRP), suspended the board and imposed a moratorium on the airline’s financial obligations.