The Indian aviation sector has witnessed a significant development as creditors of the bankrupt airline Go First (formerly known as Go Air) have decided to liquidate the company. This decision marks the conclusion of the airline’s operations, which were halted in May 2023. Despite several attempts to rescue the airline through potential bids, the Committee of Creditors (CoC) concluded in August 2024 that liquidation was the most feasible path forward.
Go First had ceased operations due to insurmountable financial challenges, accumulating debts totaling R6,521 crore ($798 million). Major creditors included prominent financial institutions such as the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank. Faced with ongoing costs and the impracticality of further investments, the CoC, after careful deliberation, opted for liquidation. A banking source, cited by Republic Business, expressed that continuing to invest in the airline under these circumstances was unviable.
During the insolvency process, which spanned from May 2023 to August 2024, the airline received interest from two potential bidders. However, these bids were evaluated and eventually deemed insufficient in terms of the capital required to revive the airline. Despite being given adequate time to enhance their proposals, the bidders failed to meet the creditors’ expectations, leading to the decision to proceed with liquidation. This process is set to commence following the completion of all legal formalities.
Go First operated a fleet comprising 30 Airbus A320 aircraft and 56 A320neos at the time of its cessation. The airline also had orders for an additional 72 A320neos. The future of these assets became a focal point during the bankruptcy proceedings. Initially, a legal moratorium was placed, preventing leasing companies from reclaiming their aircraft. This moratorium was lifted in April 2024, which allowed lessors to retrieve their planes, further diminishing the airline’s assets and complicating the potential for revival.
The liquidation of Go First underscores the volatile nature of the Indian airline industry, which has seen varying degrees of success and failure among its carriers. While airlines like IndiGo have experienced significant growth, others such as Jet Airways and SpiceJet have faced considerable challenges. The closure of Go First adds another chapter to the narrative of India’s challenging aviation environment.