Tribunal orders liquidation of grounded Go First after liabilities mount to Rs 11000 crore

The National Company Law Tribunal (NCLT) has ordered the liquidation of the grounded low-cost airline Go First, marking the final chapter in the airline’s financial turmoil. The decision was delivered by an NCLT bench comprising Judicial Member Mahendra Khandelwal and Technical Member Dr. Sanjeev Ranjan, who upheld the Committee of Creditors (CoC) application for liquidation.

The CoC had filed for liquidation in September 2024, citing the airline’s lack of aircraft and an absence of a viable revival plan. The NCLT had reserved its judgment in December 2024, and the ruling now confirms the end of any potential recovery efforts.

Fleet disintegration and financial struggles

The airline's collapse was accelerated by the repossession of its aircraft by lessors. According to legal representatives of Go First’s creditors, by December 31, 2024, more than half of the airline's 54 aircraft had left India, with a significant portion repossessed by leasing firms. By the end of 2024, 28 aircraft had already been reclaimed by their respective lessors.

Go First's financial troubles began in May 2023, when the airline filed for bankruptcy. Despite receiving two financial bids under the insolvency process, lenders ultimately decided to liquidate its assets after rejecting the suitors' proposals for revival.

Massive debt and creditor exposure

Go First's total liabilities amount to Rs 11,000 crore, with significant dues to banks, lessors, vendors, travel agents, and customers. The airline owes ₹6,521 crore to its lenders, including:

Central Bank of India – Rs 1,987 crore
Bank of Baroda – Rs 1,430 crore
Deutsche Bank – Rs 1,320 crore
IDBI Bank – Rs 58 crore

In addition, the airline has Rs 2,000 crore in outstanding dues to aircraft lessors, Rs 1,000 crore owed to vendors, Rs 600 crore to travel agents, and Rs 500 crore in pending customer refunds.

Adding to its debt burden, Go First had also borrowed Rs 1,292 crore under the government's Emergency Credit Line Guarantee Scheme (ECLGS), introduced during the Covid-19 crisis to support struggling businesses.

Foreign aircraft lessors had been locked in legal disputes with Go First, as a court-imposed moratorium initially blocked repossession of their planes. However, in April 2024, a local court allowed lessors to reclaim their aircraft, effectively sealing the airline’s fate.

Key Assets Up for Liquidation

The Wadia Group, which owned Go First, had pledged a 94-acre land parcel in Thane as collateral to banks. The property, estimated to be worth Rs 3,000 crore, remains one of Go First's most valuable remaining assets. Other assets up for liquidation include an Airbus training facility in Mumbai and Go First's corporate headquarters.

Go First ceased operations on May 2, 2023, and its plea for voluntary insolvency was admitted by the NCLT on May 10, 2023. Despite initial hopes of restructuring, the airline's financial position deteriorated further, leading to Monday's liquidation ruling.