On October 3, 2023, the government announced that Go First’s leased aircraft and engines would not come under the moratorium of bankruptcy, which lowered the chances of Go First’s revival. Currently, the bankrupt airline is staring at liquidation or potential recovery given the shortage of buyers’s interest in it, mounting prices, and fleet uncertainty. According to the people familiar with the matter, the lenders of Go First are seeking more time for a rescue however only a single investor seems to be interested in the airline. If the bankruptcy moratorium is applied it would imply a lessor can take away 53 leased aircraft. You should stick with this page and go through this column till the end to know more details.
October 3 Government Notification further obscured Go First’s revival. It stated that leased aircraft and engines would not come under the bankruptcy moratorium which means if applied a lessor can potentially take away its 53 leased aircraft, ending any chance of revival. Sources familiar with the matter said, “Strictly going by the way the MCA (Ministry of Corporate Affairs) and the DGCA (Directorate General of Civil Aviation) are treating the situation at Go First, liquidation seems to be the only direction the airline is headed for. It’s only a matter of time,”
Still, lessors will first seek an extension of the resolution deadline after Delhi HC announced on 3 November in a case between the airline and its lessors. The 3 October notification by the government was meant to comply with the Cape Town Convention, prevent higher fares, and control rental costs. People who have knowledge of the matter said, “We have to see whether this rule will be applied prospectively or retrospectively, but the government’s direction is clear. We have to see how the court handles the case. But, even if it is applied prospectively, the aircraft in Go First is deteriorating fast, which will demand more money than expected if a revival is desired. Will a buyer or existing stakeholders be willing to spend that extra money for the already-indebted airline?”
According to insolvency filings of Go First, the airline owes at least Rs 11,463 crore collectively to banks, international vendors, and lessors. According to insolvency filings, at least Rs 6,521 crore is due towards financial creditors, including Bank of Baroda, Central Bank of India, Deutsche Bank Ltd, and IDBI Bank Ltd. A spokesperson for the Deutsche Bank declined to comment.