In a major announcement today, GoFirst Airlines is relieved, as National Company Law Tribunal (NCLT) accepted its voluntary plea to restructure its debt and liabilities. GoFirst is expected to return soon as it’s priority number one to save the airlines when it can be. The NCLT bench has already appointed 2 officials to carry out the restructuring of the company. GoFirst has done a tremendous job to save the airline but entering into bankruptcy protection as early as possible. This move will ensure that GoFirst does not meet the same fate as Jet Airways.

GoFirst’s fleet of aircraft (40 to be precise), could have been taken over by the lessors due to non-rental payments. But once the company has gone into NCLT, there is no recourse. It’s upon the NCLT and the bench to restructure its debt and liabilities.

Here’s a 5 pointer for your better understanding –

• Calling the order a “perfect example” in the context of reviving a viable business before it becomes unviable, Go First CEO Kaushik Khona told news agency PTI that it was “historic”. 
• The crucial decision comes at a time when foreign lessors, including major global names such as Jackson Square Aviation, SMBC Aviation Capital, and CDB Aviation’s GY Aviation Leasing, are trying to repossess 40 Go First planes over missed rental payments. Any such recoveries are prohibited once bankruptcy proceedings are initiated for a company.
• It is the first time that an Indian airline has filed for insolvency/bankruptcy protection to renegotiate its contracts.
• The IRP appointed a two-member bench of Abhliash Lal of Alvarez & Marsal who will take over the management of the company.
• It has also put the company under the protection of a moratorium and directed the suspended board of directors to assist the IRP in running the company during insolvency proceedings.
• The NCLT has ordered the company to keep functioning and none of its 7,000 employees is laid off.
• The low-cost carrier, which until recently was India’s fourth-largest airline by passengers flown, filed for bankruptcy protection, blaming “faulty” Pratt & Whitney engines for the grounding of about half its 54 Airbus A320neos. The US engine maker, part of Raytheon Technologies, has called the claims without evidence.
• Aviation regulator DGCA had on Monday issued a show cause notice to the troubled budget carrier “for their failure to continue the operation of the service in a safe, efficient and reliable manner”. DGCA also directed it to immediately stop bookings and sale of tickets directly or indirectly till further orders.
• GoFirst is expected to revert within 15 days of the receipt of the notice. A decision will then be taken for the continuation of their Air Operator’s certificate.
• The airline has suspended sale of tickets till May 15, and has cancelled all flights till May 19.
• This crisis exposes the immense competition among Indian Airlines, the likes of Indigo, Air India, Vistara and Spicejet.

We will keep you updated with the developments of the case as it pans out. Apart from the NCLT proceedings, the matter of Prat and Whitney is in the hands of the US Court. The US Court will decide the future of the new engines which GoFirst will receive, if any.

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Source NDTV