In wake of budget airline Go First going for insolvency resolution proceedings due to financial difficulties, Civil Aviation Minister Jyotiraditya Scindia on Thursday expressed concern over the situation, acknowledging that it is not favourable for the industry.
Talking to reporters here, he emphasised that while Go First’s financial challenges impact the civil aviation sector, it is the responsibility of each company to address their individual issues.
He assured that the Ministry remains committed to supporting airlines in overcoming any underlying problems they may face.
Meanwhile, Go Airlines has extended the suspension of flight operations till May 26.
Earlier, on May 10, the National Company Law Tribunal (NCLT) admitted the voluntary insolvency petition filed by the airline and appointed Abhilash Lal as the Interim Resolution Professional (IRP).
The Principal Bench of NCLT, New Delhi also declared a moratorium for the company and directed the suspended Board of Directors to cooperate with the IRP.
The NCLT has also ordered the suspended management to deposit Rs 5 crore for the IRP to meet the immediate expenses to be adjusted by the Committee of Creditors (COC) to be formed soon.
It had also ordered the company from retrenching any of its employees.
Blaming global aircraft engine maker Pratt & Whitney of not providing spare engines for defective ones resulting in the grounding of nearly half of its fleet, Go First Airlines had approached the NCLT with a petition for resolution on May 2.
In reaction, Pratt & Whitney’s spokesperson in a statement said: “Go First’s (Go Airlines brand) allegations that Pratt & Whitney is responsible for its financial condition are without merit. Pratt & Whitney will vigorously defend itself against Go’s claims, and is pursuing its own legal recourse.”
The airline had approached the NCLT to retain its aircraft from being repossessed by the lessors. With the bankruptcy cover, the lessors have to petition the NCLT.
It was also reported rival airlines have started talking with the airport authorities to take over the slots occupied by Go Airlines.