New Delhi: The National Company Law Tribunal (NCLT) will hear on Thursday (May 4) the insolvency plea of cash-strapped carrier GoFirst.
On Tuesday, the airline had said 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 50 per cent of its fleet. Held responsible.
GoFirst 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.
GoFirst owes Rs 6,521 crore to financial creditors, its bankruptcy filing revealed.
The voluntary bankruptcy petition filed by Go Airlines will have an impact on its lenders, ie banks. However, private lender Axis Bank said in a regulatory filing on Wednesday that it does not have any funded or non-funded exposure to the financially troubled Go Airlines.
As per reports, banks like Bank of Baroda, IDBI Bank and Central Bank of India have exposure to this private airline.
While the airline had said that its promoters have infused Rs 3,200 crore in the last three years and their total investment in the venture is around Rs 6,500 crore, it remained silent on its dues when asked by IANS.
As per reports, the total liability owed by the airline to banks, other creditors, vendors etc – around Rs 11,463 crore.
Responding to a list of questions from IANS, a spokesperson for aircraft engine supplier Pratt & Whitney said, “GoFirst (the brand of Go Airlines) has a long history of meeting its financial obligations to Pratt.”
The Wadia Group 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, has refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 arbitration rules of the Singapore International Arbitration Center (SIAC), Go Airlines was accused.
“Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. P&W (Pratt & Whitney) is complying with the March 2023 arbitration award related to Go First . Since this is a matter now pending on litigation, we will not comment further,” a P&W spokesperson said.
Go Airlines is perhaps the first Indian airline to blame an engine manufacturer for its financial troubles and grounding operations.