Go First Crisis: The future of about 5000 employees of the airline Go First, which has declared itself bankrupt, is in danger. However, GoFirst CEO Kaushik Khona has assured that the airline is taking all possible steps to deal with the situation and is concerned about the employees.
Meanwhile, the National Company Law Tribunal (NCLT) has fixed May 4 as the date for hearing the insolvency plea of NCLT Go First. Explain that GoFirst has filed an application for voluntary insolvency proceedings. Along with this, the airline has suspended its flights from May 3 to 5.
What the ceo said
In a message to employees, the airline’s CEO Kaushik Khona said the failure of Pratt & Whitney (P&W) to supply engines has led to a serious crisis. He said the airline management has been trying to convince P&W to provide spare engines and repair them for more than 12 months. Despite this, the P&W is stalling the talks, he said. Khona said that in such a situation the airline has taken steps for emergency arbitration in Singapore in this matter.
What happened when
Kaushik Khona said the mediator has asked P&W to lease at least 10 serviceable spare engines by April 27. In addition, an order to lease 10 more locomotives by December 2023 has been placed on P&W. Unfortunately, Pratt & Whitney has chosen not to comply with the emergency arbitration order.
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Thereafter, the airline once again approached the arbitrator who again sought compliance of his order, he added. However, P&W is still not ready to accept this order. In such a situation, the airline has appealed for enforcement action in the US court.
Khona said that with the shrinking fleet size, the airline is not able to generate revenue to pay the lessors. And the lessees are taking coercive action against the airline. They are demanding their aircraft back.
He said that in this situation the airline has no option but to go for voluntary insolvency resolution process. Its objective is to keep the company in operation through effective measures.
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What to say to employees
The CEO said- We want to assure you that all efforts are being made to deal with this situation. We are worried about all the employees. “I hope that once the application under Section 10 of IBC for interim relief is considered, we will be in a better position to apprise you of the plan of action. As soon as we get the order from NCLT, we will inform about it. Section 10 of the Insolvency and Bankruptcy Code (IBC) deals with the voluntary insolvency resolution process.
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