Creditors of defunct Indian budget airline Go First (which was originally known as Go Air) have voted to liquidate what is left of the airline, selling its assets and winding up the company. After the airline rejected several rescue offers from potential suitors since ceasing operations in May 2023, this latest move now seems to have ended any hope of saving the airline.
The airline’s creditors’ committee has voted for liquidation in early August 2024, reports Republic Business, which obtained the information from banking sources involved in the process. According to the sources, lenders considered liquidation “the best way forward,” citing the impracticality of investing further funds to cover ongoing costs related to the bankruptcy proceedings. One of the bankers told Republic Business: “It makes no sense to continue pumping more money (into the company).”
Between May 2023 and August 2024, administrators acting on behalf of Go First in the insolvency proceedings were contacted by two potential bidders for the defunct airline. However, both offers were deemed insufficient in terms of capital investment to revive the company. According to a source, the bidders were given sufficient time to review and increase their offers, but even after that, both offers fell short of lenders’ expectations.
As a result of the creditors’ decision to liquidate the company, the process will begin “as soon as all legal formalities are completed.” According to recent reports, the airline has accumulated debts of R6,521 million ($798 million) during its existence, which it owes to several creditors, including the Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank.
According to ch-aviation, at the time of its closure, the airline operated a fleet of 30 Airbus A320 aircraft, as well as 56 A320neo – all of which have either been repossessed by lessors or are stored at various locations in India. The airline also had an order for another 72 A320neo to supplement its fleet.
The insolvency proceedings have been significantly delayed since May 2023 due to a legal dispute between the creditors and various leasing companies. While the courts in India initially imposed a moratorium preventing the lessors from retrieving their aircraft until all rescue offers had been considered, this decision was finally overturned in April 2024, allowing the lessors to get their aircraft back.
However, the decision to lift the moratorium subsequently had a very negative impact on the prospects of finding a suitable buyer for the airline, as the airline now lacked airworthy aircraft to launch a comeback and the airline became virtually worthless.
The impending liquidation of Go First brings an end to this chapter of India’s turbulent aviation industry. While some airlines like IndiGo have experienced unprecedented growth in recent years, others have stumbled. Jet Airways, the country’s largest airline at the time, went bust in 2019, while others like SpiceJet seem to be constantly embroiled in legal disputes over debts with various creditors and leasing companies.
