Travel Trade Journal

Go First files for voluntary insolvency, DGCA orders timely refunds for passengers


Go First has filed for bankruptcy, which could send ripples across the domestic aviation sector, right from raising passenger fares and triggering a rush among competitor­s to grab Go First’s market share.

The Wadia Group-owned airline, Go First has blamed the engine manufactur­er Pratt and Whitney stating that it has been forced to do so due to the ever-increasing number of failing engines supplied by Pratt & Whitney, resulting in the grounding of 25 aircraft equivalent to 50 per cent of its Airbus A320neo aircraft fleet.

While the matter has been brought to the notice of the National Company Law Tribunal (NCLT) Delhi for resolution under section 10 of the Insolvency Bankruptcy Code (IBC), The appeal is aimed at restructur­ing the airline’s debt and liabilitie­s, which have been exacerbate­d by the COVID-19 pandemic.

The airline also had initially cancelled its flights on May 3 and 4, 2023, but the Directorat­e General of Civil Aviation (DGCA), issued a show cause notice to Go First for cancelling all flights without giving any prior intimation. Yet the airline cancelled flights till May 09, 2023, and in the latest developmen­t the crisis-hit airline has extended the cancellati­on of all its flights until May 12, citing ‘operationa­l reasons’ and is uncertain about its future.

DGCA has asked Go First to refund passengers and the airline may have to pay Rs 350 crore for flights cancelled till May 9. However, the airline said in a recent tweet said that it would issue a full refund to the original mode of payment for the cancelled flights.

On the other front, the NCLT has reserved orders on the airline’s plea seeking protection under moratorium. The airline has made a plea seeking a moratorium to prevent lessors from taking possession of planes. Aircraft lessors told the tribunal that they represent 25 aircraft of the Go First fleet.

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