NCLT To Hear Go First's Insolvency Plea Today

New Delhi: The National Company Law Tribunal (NCLT) will hear cash-strapped carrier Go First's insolvency plea on Thursday (May 4).

On Tuesday, the airline had said that it has filed for insolvency resolution as it can no longer continue to meet its financial obligations, blaming US company Pratt & Whitney's "faulty engines" for grounding of 50 per cent of its fleet.

Go First had also announced suspension of all its flight operations from May 3 to May 5.

Its CEO Kaushik Khona had confirmed on Tuesday that the airline has filed an application for voluntary insolvency resolution proceedings before the NCLT.

Go First owes financial creditors Rs 6,521 crore, its bankruptcy filing showed.

The voluntary bankruptcy petition filed by the Go Airlines will be impacting its lenders, i.e., banks. However, private lender Axis Bank said on Wednesday in a regulatory filing that it has no funded or non-funded exposure to the financially-troubled Go Airlines.

According to reports, banks like Bank of Baroda, IDBI Bank, and Central Bank of India have exposure to the private airline.

While the airline had said that its promoters had infused Rs 3,200 crore in the last three years and their total investment in the venture is approximately about Rs 6,500 crore, it is silent on its dues when queried by IANS.

As per reports, the airline has a total liability  dues to banks, other creditors, vendors etc. - of about Rs 11,463 crore.

"Go First (the brand of Go Airlines) has a lengthy history of missing its financial obligations to Pratt," a spokesperson for aircraft engine supplier Pratt & Whitney said in response to IANS' list of questions.

The Wadia group's airline had blamed Pratt & Whitney for its decision to file a voluntary bankruptcy petition with the National Company Law Tribunal (NCLT).

Pratt & Whitney, the exclusive engine supplier for its Airbus A320neo aircraft fleet, refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC), Go Airlines had alleged.

"Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritise delivery schedules for all customers. P&W (Pratt & Whitney) is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further," the P&W spokesperson said.

Perhaps Go Airlines is the first Indian airline to blame an engine-maker for its financial troubles and for grounding operations.