India’s Go First Airline to Be Liquidated

Go First (GOW, Mumbai International) is set to be liquidated following a decision by its committee of creditors (CoC) after recent acquisition offers failed to meet expectations. An insolvency application will be filed with the National Company Law Tribunal (NCLT) on August 5, 2024.

Earlier this year, Go First received two formal bids: one from a consortium led by SpiceJet (SG, Delhi International) promoter Ajay Singh and EaseMyTrip’s Nishat Pitti, and another from Sharjah-based Sky One. However, the CoC had concerns regarding the bid structures and the amount of upfront cash. In May, after the Delhi High Court allowed lessors to deregister and export their aircraft, Singh and Pitti withdrew their bid, leaving Sky One as the sole bidder.

The airline, which suspended flights in May 2023, is facing creditor claims totaling INR65.21 billion (USD780 million). Major creditors include Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, with claims of INR19.34 billion (USD231 million), INR17.44 billion (USD208 million), and INR750 million (USD9 million), respectively.

Go First’s collapse was exacerbated by issues with Pratt & Whitney engines, leading to significant grounding of its fleet. The airline has filed a claim against Pratt & Whitney in the Singapore Court of Arbitration, seeking around USD1 billion in compensation. The CoC believes pursuing this claim is the best way to recover some of the debts.

Recently, the NCLT granted Go First’s administrator a two-month extension to resolve the airline’s future. This extension expired on August 3, with no further extensions permitted.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com