Go First, the airline carrier of the Wadia Group, has argued before the National Company Law Appellate Tribunal (NCLAT) that the termination of leases for its aircraft by lessors would not have any consequence as a moratorium has been imposed under insolvency resolution proceedings. The airline’s statement comes as aircraft lessors express doubts over the airline’s ability to revive itself through the corporate insolvency resolution process (CIRP), citing the large amount required to make it fly again.
SMBC Aviation, one of the aircraft lessors, highlighted that the average lease rent per aircraft is approximately USD 2 lakh for a month, and with more than 50 aircraft, the monthly bill would be USD 10 million. Such high costs have raised concerns over the feasibility of the airline’s revival, especially given the challenging economic environment for the aviation industry due to the ongoing COVID-19 pandemic.
Despite these challenges, Go First remains optimistic about its future and its ability to restructure its operations to become profitable once again. The airline’s management team has expressed confidence in the CIRP process and has been working diligently to identify potential investors and secure the necessary funding to continue its operations.
Go First has also emphasized that the moratorium under the insolvency resolution proceedings provides it with the necessary breathing room to address its financial challenges and develop a viable business plan. As a result, the airline believes that the termination of leases for its aircraft would not have any significant impact on its ability to continue operating and restructure its operations successfully.
The NCLAT is expected to make a final decision on the matter soon, and its ruling will have significant implications for both Go First and the broader aviation industry in India. If the tribunal rules in favor of the airline, it will provide it with the necessary support to continue its operations and work towards a successful restructuring. However, if the ruling goes against Go First, it could signal the end of the airline’s operations and the loss of thousands of jobs.
