Go First Insolvency: Carrier faces bleak future as lenders assess fund infusion plans

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₹6,500 crore, as per a report by The Economic Times. Regulatory clearance for lessors to repossess leased aircraft has made it impractical for banks to commit fresh capital in the maiden instance of voluntary bankruptcy in Indian aviation, it said. Also Read: Go First Lessors Demand Aircraft Deregistration Post Bankruptcy Code Changes The Directorate General of Civil Aviation (DGCA) informed the Delhi High Court via an affidavit that the recent directive exempting aviation leases from the bankruptcy moratorium should be applicable even to companies undergoing insolvency proceedings.

This significantly diminishes the likelihood of the airline's revival, potentially causing a loss of ₹6,500 crore to creditors, the report said. Bankers thus voiced concerns that if lessors are allowed to reclaim aircraft, it would render the airline's revival virtually impossible. "It seems as though Go First's fate is sealed.

With the DGCA's stance, restarting operations appears highly unlikely, as the aircraft will likely be repossessed. While lenders maintain that this new law cannot have a retrospective application, the protracted legal proceedings make a resolution nearly unattainable.," a stakeholder told the paper. Also Read | Go First case: Govt may clarify on amendments in IBC on leased aircraft Central Bank of India and Bank of Baroda hold the top two positions among the airline's creditors, with dues amounting to ₹1,987 crore and ₹1,430 crore, respectively, the report said.