Go First granted insolvency protection by NCLT but cannot lay off employees.
The NCLT's recent decision regarding Go First's insolvency process has brought both relief and uncertainty. Despite facing a colossal debt crisis, the airline has been granted protection from legal action and the right to continue operations by the NCLT. However, the tribunal has also mandated that the company cannot lay off any employees, leaving the future of thousands of workers in question.
The NCLT bench, headed by Chairperson Justice Ramalinga Sudhakar and Justice LN Gupta, has appointed Abhilash Lal as interim professional to manage the airline during the insolvency process. The suspended board has also been instructed to assist the resolution professional. However, this has not put the minds of employees at ease, especially considering the company's outstanding debt of Rs 11,463 crore, including Rs 3,856 crore of defaults.
The insolvency petition filed by Go First itself highlights the severe financial strain the company is facing. The airline has blamed its engine supplier, Pratt & Whitney, for the majority of its troubles, alleging that it is unable to fly 50 percent of its planes due to engine supply issues. In addition, the company owes Rs 2,600 crore to aircraft leasing companies and Rs 6,521 crore to financial creditors as of April 30.
The NCLT's decision was reached after hearing arguments from other airlines, including Wadia Group's aviation company and aircraft leasing companies, who had protested the petition and urged for interim protection. The NCLT had previously noted that there is no provision for interim moratorium under the Insolvency and Bankruptcy Act. If the petition is accepted, only an Absolute Moratorium can be implemented.
Despite the relief of protection from legal action and the ability to continue operations, the future of Go First and its employees remains uncertain.
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