The National Company Law Tribunal has postponed its hearing on Go First’s insolvency case to July 11, leaving engine lessors in a difficult situation. This decision comes after the tribunal expressed the need for more time to review the Delhi High Court’s directive to deregister all 54 aircraft owned by Go First by May 3, 2024.
Engine lessors have urged the tribunal to deregister their engines connected to the deregistered aircraft, especially if these aircraft are required to leave the country after deregistration.
They have also pointed out that with the Directorate General of Civil Aviation deregistering all 54 aircraft as per the Delhi High Court order, the Resolution Professional appointed for Go First no longer has jurisdiction. However, the Resolution Professional has not contested this decision.
The Resolution Professional declined to provide clarity on the airline’s future course of action, indicating uncertainty regarding Go First’s fate. Reports suggest that Go First is likely headed towards liquidation, as it has chosen not to challenge the Delhi High Court’s order.
Lenders have expressed concerns about potential losses in the event of liquidation, citing diminished asset values due to prolonged legal battles.
Go First filed for bankruptcy in May last year, triggering a prolonged struggle among lessors, lenders, and the Resolution Professional over control of the aircraft. The Delhi High Court’s directive to deregister leased planes provided some relief to lessors, allowing them to claim their aircraft.
The aviation industry has faced challenges, with global aircraft and engine lessors expressing frustration over their inability to repossess planes from Go First due to ongoing legal disputes. Go First had sought multiple extensions from the National Company Law Tribunal to complete its insolvency process, with the latest extension granted in April.
Despite these challenges, the Ministry of Corporate Affairs issued a notification last year exempting aircraft-related arrangements from certain provisions of the Insolvency and Bankruptcy Code, providing some relief to stakeholders involved in the process.
