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DALLAS – Indian low-cost carrier (LCC) GoFirst (G8), which ceased operations in May last year, is to be liquidated. The airline’s creditors have unanimously voted to liquidate the collapsed airline. G8 is India's second airline to shut operations in the past decade.
According to The Economic Times, after unsuccessful attempts to revive the Mumbai (BOM) based LCC, liquidation was the only option as the bids to buy the entity were below the creditor’s expectations.
The liquidation process must now be approved by the National Company Law Tribunal (NCLT), a partly judicial body adjudicating issues relating to Indian companies.
Buyers' Pullout, Lender's Hard Recovery
According to an Airinsight report, SpiceJet (SG) promoter Ajay Singh was keen to revive G8 and placed a bid for the airline. Singh made the bid in his personal capacity. Sharjah-based Sky One Aviation made the only other bid.
The High Court in Delhi subsequently allowed the lessors of G8’s 54 aircraft to take them back. With the aircraft repossessed, there was little hope of reviving the airline. After the High Court granted permission for aircraft lessors to reprocess their aircraft, Singh withdrew his bid, saying there was no value left in the LCC.
In May 2023, G8 said its grounding was caused by the increasing number of failures of Pratt & Whitney engines, resulting in the grounding of 25 aircraft. This was equivalent to 50 percent of its Airbus A320neo aircraft fleet at the time.
The Economic Times reports that the lenders can expect to recover some funds from G8’s litigation against engine manufacturer Pratt and Whitney.
GoFirst owes INR 65.21 billion (US$781.14 million) to its creditors, which include the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank.
Featured image: GoFirst
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