National Company Law Appellate Tribunal (NCLAT) dismissed a plea challenging the liquidation of bankrupt airline Go First (formerly GoAir) on April 4. The appellate tribunal’s bench, headed by Justice Ashok Bhushan, cited the January 20 order to proceed with liquidation due to the airline’s lack of assets and an unviable recovery plan, the Mint reported.
The plea was filed by EaseMyTrip co-founder Nishant Pitti-backed Busy Bee Airways. Busy Bee Airways contested liquidation and claimed that NCLT had passed the liquidation order without giving proper consideration to objections raised by it. Consequently, it moved to NCLAT, challenging the order.
The move came after Nishant Pitti-backed airways showed interest in acquiring the airline, citing reasons like Go First’s valuable intangible assets, including its Directorate General of Civil Aviation (DGCA) license. Busy Bee had initially shown interest in acquiring Go First and had moved a bid worth Rs 1,600 crore for the same. But later, as the airline lost operational aircraft, Busy Bee pulled back only to re-enter the race with an increased bidding amount worth Rs 1,800 crore.
Apart from EaseMyTrip co-founder, Sky One Airways owner Jaideep Mirchandani had also initiated a bid but later withdrew after the Delhi High Court allowed the lessors to repossess all 54 Go First aircraft.
But Busy Bee isn’t the only one opposing Go First’s liquidation. Mumbai-based trade union Bhartiya Kamgar Sena had filed a plea contesting that the process will render nearly 5,000 employees jobless. The plea was later rejected by NCLAT.
Go First’s Bankruptcy Background
Go First airline, which had once soared in the Indian civil aviation industry, began facing financial issues coupled with travel restrictions during Covid-19 pandemic. The airline eventually took the route of filing a voluntary bankruptcy application with the NCLT in 2023. It claimed that it had grounded nearly 25 of its Airbus A320neo aircraft due to Pratt & Whitney’s engine failure and consequently suffered from cash crunch. The financially troubled airline contested that all this happened as Pratt & Whitney had failed to fulfill its contractual obligations to supply at least 10 serviceable spare leased engines.
“Had Pratt & Whitney complied with the emergency arbitrator’s award, all of Go First’s aircraft would have been operational by August/September 2023, ensuring profitable operations,” Go First had earlier said in a statement.
