GoFirst insolvency resolution process extended yet again

14 June,2024 07:15 AM IST |  Mumbai  |  Prasun Choudhari

60 day period is fourth and last extension granted to airline

The airline has received an extension till August 3. Representation pic

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As GoFirst fails to get back in the air within the insolvency time limit, the Corporate Insolvency Resolution Process (CIRP) has been extended for the fourth time. This time, it has been extended till August 3 and this is the final extension. If the airline fails to get a new owner before this date, it will be game over.
On June 12, the National Company Law Tribunal (NCLT) extended the CIRP timeline for GoFirst by 60 days. The previous deadline expired on June 3.

"The NCLT has been informed that the airline has received interest from three more parties. In addition, the current parties have revised their offers after the Delhi High Court order directing DGCA to deregister the aircraft. Hence, the lenders requested an extension of 60 more days. However, the bench has said that this is the final extension. NCLT criticised the Resolution Professional (RP) for repeatedly requesting extensions without showing any concrete progress in the resolution plan. Usually, companies do not receive this much extension, but CIRP aims to revive the airline. Hence, the final extension has been granted. However, this has not been included in the record.' said an industry source.

The source added that according to IBC 2016, a resolution process should be concluded within 180 days. "The NCLT has the provisions to stretch this period to and beyond 330 days. For GoFirst, 330 days ended in April. However, NCLT is using its discretionary power to ensure that the airline is revived."

"At present, the Air Operator Certificate (AOC) may be the only asset remaining with GoFirst. Initially, the airline lost its IATA designation. Gradually, it lost the aircraft, airport slots, CEO, and employees, and will soon lose its foreign rights permanently," said another industry source. "The airline lost its entire fleet after the Delhi High Court order directing the DGCA to deregister all the aircraft of GoFirst. With aircraft no longer registered within India, lessors can claim their assets back. In India, if an airline fails to utilise its airport slots for 12 months, they are considered as lapsed and are relocated to a different airline. All the domestic slots of GoFirst have been distributed to other airlines. It had many prized slots at Mumbai airport," the source added.

"International flying rights held by the airline have been temporarily allocated to other airlines like Air India and IndiGo. However, if there is no progress in the insolvency process, they may be allocated permanently. Akasa Air is looking at the prized 14 slots at Dubai airport, which were previously held by GoFirst," said a DGCA official.

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