According to a statement from Go First, lessors have taken actions to ground and repossess the airline’s aircraft. The company is reported to owe financial creditors a total of 65.21 billion.
Go First’s financial troubles could potentially harm its business risk profile and result in a loss of market share. Its lenders, including Central Bank of India, Bank of Baroda, Axis Bank, IDBI Bank, and Deutsche Bank, may also face difficulties in recovering their loans due to the airline’s financial difficulties. Although Go First claims that it has not defaulted on payments to its financial creditors up until April 30, it anticipates that default to these creditors “would be imminent.” The airline owes a total of ₹114.63 billion to various creditors, including banks, financial institutions, vendors, and aircraft lessors.
Indian budget airline Go First has filed for insolvency resolution proceedings, citing serious cash shortages. The company stated that its assets are currently insufficient to meet its liabilities, and it has defaulted on payments to operational creditors, including vendors and aircraft lessors. The airline has received termination notices from lessors for aircraft lease agreements, and some have started taking action to ground or repossess aircraft. Go First will temporarily halt operations on May 3 and 4, and the company’s financial difficulties may impact its business risk profile, resulting in a loss of market share. The airline’s total liabilities to all creditors stand at INR 114.63 billion, including dues to banks, financial institutions, vendors, and aircraft lessors.
According to CEO Kaushik Khona, Go First is experiencing a financial crisis due to Pratt & Whitney’s failure to provide engines, which has resulted in the grounding of 28 of its aircraft. As a result, the company has requested voluntary insolvency resolution procedures from the National Company Law Tribunal (NCLT). Khona acknowledged that the decision to take this step was regrettable but necessary to protect the company’s interests. The airline has notified the government of the situation and will provide a detailed report to the Directorate General of Civil Aviation (DGCA) on aviation safety.