A year into bankruptcy, Go First’s case threatens to ground India’s aircraft leasing dreams

Nearly a year ago, in May 2023, Indian budget carrier Go First approached the National Company Law Tribunal (NCLT) to file for bankruptcy. Merely the latest in a long line of failed Indian airlines, Go First blamed its predicament on the grounding of about half of its over 50-strong aircraft fleet due to engine issues.

Since then, even as air travel in India has reached new highs—with the country poised to become the world’s third-largest aviation market—numerous efforts to revive the bankrupt carrier have come to nought. The company even mooted a plan to resume operations with just 15 aircraft, but the idea didn’t get off the ground.

Despite its aircraft gathering dust for nearly a year now, Go First received a reprieve last week when the NCLT granted it another 60 days to complete its corporate insolvency resolution process (CIRP). This extension further draws out Go First’s CIRP, which has already gone beyond the 330-day timeframe stipulated by India’s Insolvency and Bankruptcy Code (IBC).

While this in itself isn’t novel—the IBC’s 330-day limit for CIRP is often extended—and keeps hopes of Go First’s revival alive, it puts the lessors of the airline’s 54 aircraft in a tough spot. These lessors have been fighting in the courts to regain possession of the aircraft they leased to Go First. The airline reportedly owes its lessors over Rs 2,600 crore.