The National Company Law Tribunal on Tuesday admitted Go First’s voluntary insolvency plea. With the admission of the case, moratorium kicks in and the creditors and lessors will now have to submit claims to the resolution professional, who will be appointed.
Go First filed for insolvency with the Principal Bench of the National Company Law Tribunal (NCLT), Delhi and requested the bench led by the NCLT for an urgent hearing.
The bench took up the insolvency petition filed by Go Airlines last Tuesday. The airline filed for bankruptcy citing operational losses caused due to ever-increasing failure of Pratt & Whitney engines that power its fleet.
NCLT heard the petition under section 10 of the Insolvency and Bankruptcy Code, under which a corporate body can voluntarily initiate an insolvency resolution process. The bench will now appoint a resolution professional to take over the affairs of the company.
On May 1, Go Air said it has grounded 25 aircraft due to 'failing engines' supplied by Pratt & Whitney's International Aero Engines. This translates into around 50 percent of its Airbus A320neo fleet. The airline said that the grounding of about half of its A320 neo fleet due to the 'serial failure' of Pratt & Whitney engines has cost it ₹10,800 crore in terms of revenues and expenses.
"The percentage of grounded aircraft due to Pratt & Whitney's faulty engines has grown from 7% in December 2019 to 31% in December 2020 to 50% in December 2022. This is despite Pratt & Whitney making several on-going assurances over the years, which it has repeatedly failed to meet," the Wadia Group-owned budget carrier said in a statement.
The airline also maintained that it was forced to apply to the NCLT after engine supplier Pratt & Whitney refused to comply with an award issued by an emergency arbitrator appointed by the Singapore International Arbitration Centre (SIAC). That order directed Pratt & Whitney to release and dispatch without delay at least ten serviceable spare leased engines to Go First by April 27, 2023, and a further ten spare leased engines per month until December 2023.