The New Delhi Bench of the National Company Law Tribunal (NCLT) has ordered the liquidation of Go First Airlines, bringing a close to a 20-month-long insolvency process. The decision follows the failure to arrive at a viable resolution plan for the airline, leading the tribunal to uphold the Committee of Creditors’ (CoC) decision to liquidate the company. Notably, the CoC approved this course of action with a unanimous vote of 100%.
The liquidation order comes after Go Airlines, which filed for Corporate Insolvency Resolution Process (CIRP) under Section 10 of the Insolvency and Bankruptcy Code (IBC) on May 10, 2023, struggled to secure a sustainable recovery plan. The airline, once a prominent player in the Indian aviation industry, faced mounting financial difficulties exacerbated by operational challenges, leaving it unable to navigate its way out of insolvency.
As part of the proceedings, Mr. Shailendra Ajmera was appointed as the Resolution Professional (RP) by the Committee of Creditors to oversee the process. However, despite efforts to explore potential resolutions, the lack of a viable plan led to the inevitable outcome of liquidation.
The liquidation of Go First Airlines marks a significant development in the Indian aviation sector, especially as the airline was one of the country’s leading low-cost carriers. It serves as a reminder of the financial challenges faced by airlines in the competitive and volatile aviation market. The liquidation process will now focus on the disposal of the airline’s assets to satisfy its creditors, while employees and passengers will await the resolution of pending claims.
This decision also underscores the critical importance of financial stability and effective management in the aviation industry, as well as the growing need for more robust recovery mechanisms for airlines struggling with insolvency. The closure of Go First Airlines marks the end of an era for the airline, but the ongoing evolution of India’s aviation sector will continue to see new players and transformations in the market.
