Go First approaches NCLT for voluntary insolvency resolution

Go First Airline has approached National Company Law Tribunal (NCLT) for voluntary insolvency resolution. The company has said that it will not be able to meet some of its current liability obligations of Rs 9000 crore because it is unable to operate many of its flights, due to fault in their engines. The engines are from Pratt & Whitney (P&W). Go First has stated that in spite of repeated requests, and order from a Singapore based arbitration tribunal, P&W has not been able to supply replacement engines in a timely manner. These disruptions, due to the engine defects, are being faced since 2020. They in turn have started to adversely impact the company’s cash flows in such a way that it is filing for voluntary insolvency resolution.

Due to this situation, the company has cancelled all its flights for 3^rd May, 4^th May, and 5^th May. It will make full refunds to its customers. Go First is part of the Wadia Group. It operates 185 flights daily. In the first quarter of 2023, it carried 30,000 passengers daily, on an average basis. 

Due to the limited competition in the domestic airline market, this situation will help other players, such  as Indigo. Indigo’s stock price is up by more than 4% today.