Go First Lives To See Another Day, Goes Into Bankruptcy Protection

Cash-strapped carrier Go First, formerly known as Go Air, has been granted bankruptcy protection by the National Company Law Tribunal (NCLT).

What Happened: In a major relief to the Wadia Group-backed airline, a bench of the NCLT has granted the low-cost carrier bankruptcy protection and halted attempts by lessors and lenders to recover their assets from the troubled airline for the time being.

The decision will also give the country’s fourth-largest airline a chance to revive itself under the insolvency resolution process (IRP).

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The airline has blamed its current financial struggles on the grounding of 25 Airbus A320neo aircraft due to issues with engines supplied by Pratt & Whitney, grounding half its fleet. Despite an emergency arbitration award requiring Pratt & Whitney to provide spare engines, the engine manufacturer allegedly failed to meet its obligations, causing further disruptions to Go First's operations.

However, Pratt & Whitney has laid the blame for Go First’s trouble on the latter’s own poor management and disruptions due to COVID-19. It also plans to contest the arbitration award, Reuters reported, citing filings at a Delaware court.

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Posted In: EquitiesMarketsGo FirstPratt & WhitneyWadia Group