Picture credits: Go First
India: In a significant and final development for Go First Airways, the National Company Law Tribunal (NCLT) has ordered the airline into liquidation. This decision comes after several months of financial strain and insolvency proceedings. The airline, which once served as a prominent budget carrier in India, is now facing the end of its operations, with mounting debts and an inability to secure a revival plan.
Financial Troubles Lead to Liquidation
Go First, previously known as GoAir, had filed for bankruptcy protection in May 2023 after failing to recover from its financial difficulties. With a staggering debt burden of ₹11,000 crore, the airline was unable to meet its obligations. According to multiple media reports, the airline owes ₹6,521 crore to various banks, including ₹1,987 crore to the Central Bank of India, ₹1,430 crore to Bank of Baroda, and ₹1,320 crore to Deutsche Bank. In addition to this, Go First is also saddled with ₹2,000 crore in dues to aircraft lessors, ₹1,000 crore to vendors, ₹600 crore to travel agents, and ₹500 crore in pending customer refunds.
In the aftermath of its insolvency filing, the airline was unable to retain a substantial portion of its fleet. By the end of 2024, more than half of Go First’s 54 aircraft had been repossessed by lessors, further crippling its ability to maintain operations. This led to Go First grounding its flights on May 2, 2023.
NCLT’s Liquidation Decision
After months of deliberation, the NCLT has now ruled for the liquidation of the airline, citing the absence of a viable revival plan and an insufficient number of assets to cover its massive debts. The Committee of Creditors (CoC), which has been overseeing the insolvency proceedings, applied for liquidation, noting that the airline had failed to present a feasible solution for its survival.
The liquidation process will involve the sale of Go First’s remaining assets. These include a 94-acre land parcel in Thane, valued at ₹3,000 crore, along with the airline’s Airbus training facility in Mumbai and its corporate headquarters. These assets will be auctioned to help recover some of the outstanding debts.
Impact on Stakeholders
The liquidation of Go First Airways is a sad outcome for its employees, creditors, and passengers. Thousands of employees are now facing job losses, while creditors are expected to absorb significant financial losses. Customers who had outstanding tickets or refunds are urged to reach out to the airline’s customer service for guidance on how to proceed.
This liquidation also has wider implications for the aviation industry in India, particularly for low-cost carriers struggling with financial instability. The case of Go First serves as a cautionary tale about the challenges of managing finances and operations in the highly competitive aviation sector.
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