Go Airlines Ltd has received claims worth Rs 240 billion from operational and financial creditors amidst its ongoing insolvency. Go First airlines which were operated by Go Airlines, filed for bankruptcy protection in May 2023.
The process is in accordance with Indian law regarding bankruptcy which allows every creditor a right to payment and remedy by submitting claims in the case of a company going bankrupt. After filing, these claims need to be verified by a resolution professional.
A banker from a state-run bank, who has exposure to the airlines, said, "Claims from the lenders are around 50 billion rupees, while lessors' claims amount to 180 billion rupees so far", as reported by Reuters.
The airline filed for bankruptcy earlier this year, after facing multiple engine issues resulting in flight cancellations and grounding of about half of its 54 Airbus fleet. It blamed engine maker Pratty & Whitney alleging they provided them with faulty engines causing operational breakdowns and financial losses for the airline. The U.S. based company strongly refuted these claims, alleging that Go First had a "lengthy history of missing its financial obligations". This resulted in a huge decline in Go First's market share from 11 per cent in November 2019 to 6.9 per cent in March 2023, as reported by Indian Express.
Go Airline's resolution professional is yet to verify these claims. The company invited investory interest earlier this month through a court-appointed administrator. “The airline has received 40 queries on EOIs (expression of interest) from potential bidders, but no formal submissions have been made as yet”, noted another banker in the Reuters report.
Also Read : Go First Gets DGCA Approval For Flight Resumption With Certain Conditions
This news comes on the heels of Indian aviation authority Directorate General of Civil Aviation (DGCA) approving the airline's plan to restart operations with 15 aircraft and 114 daily flights, on the conditions of securing approval for its flight schedule and interim funding.