Go First Airlines: India's First IBC Airline CIRP, the Pratt and Whitney Engine Crisis, and What Liquidation Means for Creditors

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Go First Airlines: India’s First IBC Airline CIRP, the Pratt and Whitney Engine Crisis, and What Liquidation Means for Creditors | Fiscal Zenith

IBC Case Study and Aviation Law | June 12, 2026 On November 4, 2005, a Wadia Group airline called GoAir took off for the first time from Mumbai. For thirteen years, it was one of India’s more disciplined low-cost carriers, turning a profit every year from FY2013 to FY2018 while better-funded rivals burned cash. Then the losses came, then the pandemic, and then a dispute with its sole engine supplier that would ground half its fleet, strip it of revenue, and ultimately force it into India’s first-ever airline insolvency under the Insolvency and Bankruptcy Code. On May 2, 2023, Go Airlines (India) Limited filed for voluntary insolvency under Section 10 of the IBC. On January 20, 2025, the NCLT ordered its liquidation. In 20 months, every attempt to revive the airline failed, every bidder fell short of lender expectations, and every aircraft was returned to its lessor. This article is a factual case study of how that happened, what it revealed about the IBC’s fitness for airline insolvency, and what liquidation means for each class of creditor.

Table of Contents

Part I: GoAir to Go First (2005 to 2022) Founding by Jeh Wadia, the profit years, the rebranding, and the failed IPO
Part II: The Pratt and Whitney Engine Dispute The GTF engine defect, 17,244 grounded aircraft-days, the SIAC arbitration, and P&W’s position
Part III: The Section 10 Filing and the CIRP Process Voluntary insolvency, Abhilash Lal as IRP, Shailendra Ajmera as RP, financial creditor claims of Rs 6,521 crore
Part IV: The Aircraft Lessor Crisis and the Cape Town Convention Moratorium vs. aircraft repossession rights, NCLAT, the October 2023 MCA notification, and the April 2024 Delhi HC order
Part V: The Resolution Bids and Why They Failed Two bids received, Ajay Singh and Busy Bee’s Rs 1,600 crore bid, Sky One Airways, CoC rejection, and liquidation decision
Part VI: Liquidation and What It Means for Creditors The January 20, 2025 NCLT order, Dinkar Venkatasubramanian as liquidator, and expected recovery by creditor class
Part VII: The Structural Lessons for Indian Aviation and IBC Law Cape Town Convention compliance, airline viability in insolvency, and the IBC’s gaps for asset-heavy companies
Frequently Asked Questions

17,244

Aircraft-days grounded by engine unavailability between January 2020 and February 2023, as stated in Go First’s April 28, 2023 filing before the US District Court of Delaware.

Rs 6,521 cr

Total admitted financial creditor claims at the time of the CIRP filing: Central Bank of India Rs 1,934 cr, Bank of Baroda Rs 1,744 cr, IDBI Bank Rs 75 cr, and others including Deutsche Bank.

20 months

Duration of the CIRP from NCLT admission on May 10, 2023 to the liquidation order on January 20, 2025, during which no viable resolution plan was received or approved.

100%

Voting share by which the Committee of Creditors approved liquidation at its 37th meeting on July 23, 2024, after both bids received were judged far below acceptable levels.

Part IGoAir to Go First (2005 to 2022)

Founding and the Profitable Years

GoAir was incorporated and commenced operations on November 4, 2005, founded by Jehangir (Jeh) Wadia, son of industrialist Nusli Wadia, as a wholly owned subsidiary of the Wadia Group. The Wadia Group is one of India’s oldest conglomerates, best known for Bombay Dyeing and Britannia Industries. GoAir positioned itself as an ultra-low-cost carrier from the start, operating an all-Airbus A320 fleet in a single-class configuration and focusing on point-to-point domestic routes.

What distinguished GoAir from rivals during its first decade was financial discipline. The airline turned a profit every year from FY2013 to FY2018, a remarkable record in an industry that routinely destroys capital. It kept its cost base lean, avoided aggressive fleet expansion, and did not compete on market share at the expense of margins. By 2019, GoAir had a domestic market share of approximately 9% and was operating around 52 aircraft. It served over 30 domestic and international destinations with approximately 200 daily flights at its peak and positioned itself as India’s fifth-largest airline.

Why the profit years mattered and then ended: GoAir’s profitability between FY2013 and FY2018 was real but limited in scale. The airline’s strategy of controlled growth meant it never built the network density or brand reach of IndiGo, which was simultaneously expanding far more aggressively. When aviation fuel costs surged and currency depreciation increased lease costs in dollar terms from FY2019 onward, GoAir did not have the revenue scale or hedging infrastructure to absorb the pressure. It reported its first loss in FY2019. The losses widened sharply in FY2020, then the COVID-19 pandemic eliminated revenue almost entirely for two years from March 2020. By the time operations resumed at scale in mid-2021, the airline was financially weakened and dependent on new capital from the Wadia Group.

The Rebranding, the Failed IPO, and the Shift to Neo Engines

In May 2021, GoAir rebranded itself as Go First. The rebranding was announced alongside an IPO filing to raise Rs 3,600 crore, which would have been used for fleet expansion and working capital. The IPO was never completed. In a market disrupted by the pandemic and with the airline reporting losses, the offer failed to attract the necessary institutional interest at acceptable valuations and was quietly shelved.

The transition to the A320neo (new engine option) fleet was central to Go First’s cost-reduction strategy. The neo variants offered 15 to 20% better fuel efficiency than the earlier CEO (current engine option) variants they were replacing. Go First ordered 144 A320neo aircraft across two firm orders of 72 each, the first placed in 2011 and the second at the 2016 Farnborough Air Show, and was in the process of replacing its older fleet with these new aircraft. The A320neo aircraft that Go First received were powered exclusively by Pratt and Whitney PW1100G-JM Geared Turbofan (GTF) engines. This choice of engine supplier, made years earlier in normal commercial conditions, would become the proximate cause of the airline’s collapse.

Nov 4, 2005

GoAir commences operations
Founded by Jeh Wadia as a wholly owned Wadia Group subsidiary. First flight operates from Mumbai. Fleet initially consists of Airbus A320 aircraft in all-economy configuration.
FY2013 to FY2018

Six consecutive profitable years
GoAir reports a profit every year from FY2013 through FY2018, a rare achievement in Indian aviation during a period when most competitors reported losses. Domestic market share reaches approximately 9% by 2019.
FY2019 onward

First losses; fuel and currency headwinds
Rising aviation turbine fuel prices, dollar-denominated lease costs rising with a depreciating rupee, and intensifying competition from IndiGo begin generating net losses from FY2019. The pandemic then eliminates revenue for most of FY2021.
May 2021

Rebranded as Go First; IPO filing
GoAir rebrands to Go First and files for an IPO to raise Rs 3,600 crore. The IPO is never completed due to weak institutional demand and the airline’s financial condition.
2020 to 2022

GTF engine groundings begin and escalate
Go First grounds 30.5% of its neo fleet in 2020, 25.6% in 2021, and 33.9% in 2022 due to unavailability of Pratt and Whitney engines and spares. Total grounded aircraft-days from Jan 2020 to Feb 2023: 17,244.
Mar 13, 2023

Go First files at SIAC against Pratt and Whitney
Go First files a complaint with the Singapore International Arbitration Centre alleging Pratt and Whitney failed to supply functional engines. On March 30 and April 2023, the SIAC emergency arbitrator orders P&W to supply engines.
May 2, 2023

Go First files voluntary insolvency under Section 10 IBC
The airline cancels all flights from May 3 onward. It files before the NCLT New Delhi Special Bench citing the engine crisis as the cause of financial default. At the time of filing, 28 of its 54 aircraft are grounded.
May 10, 2023

NCLT admits petition; Abhilash Lal appointed IRP
The New Delhi bench admits the Section 10 application. Abhilash Lal of Alvarez and Marsal is appointed IRP. A moratorium under Section 14 of the IBC is imposed, preventing lessors from repossessing aircraft. The suspended board is directed to deposit Rs 5 crore with the IRP.
Jun 15, 2023

Shailendra Ajmera appointed Resolution Professional
The CoC replaces Abhilash Lal with Shailendra Ajmera, a partner at Ernst and Young, as RP by NCLT order dated June 15, 2023 (received June 16). Ajmera takes over management of the airline and the CIRP.
Oct 4, 2023

MCA notification exempts aircraft assets from IBC moratorium
The Ministry of Corporate Affairs issues a notification clarifying that Section 14(1) of the IBC does not apply to transactions, arrangements, or agreements relating to aircraft, aircraft engines, airframes, and helicopters. Subsequent court orders apply this retrospectively to Go First.
Apr 26, 2024

Delhi High Court orders DGCA to deregister Go First fleet
The Delhi High Court directs the DGCA to process deregistration applications for all Go First aircraft within five working days. Lessors begin recovering their aircraft. With no flyable fleet remaining, Go First’s viability as a going concern effectively ends.
Jul 23, 2024

CoC votes 100% for liquidation at 37th meeting
After two bids are received and rejected as insufficient, the Committee of Creditors unanimously resolves to liquidate Go Airlines (India) Limited. Dinkar Venkatasubramanian is proposed as liquidator.
Jan 20, 2025

NCLT orders liquidation
The National Company Law Tribunal, comprising Judicial Member Mahendra Khandelwal and Technical Member Dr Sanjeev Ranjan, formally orders liquidation of Go Airlines (India) Limited. Dinkar Venkatasubramanian is appointed liquidator. The CIRP lasted 20 months.

Part IIThe Pratt and Whitney Engine Dispute

The GTF Engine and Its Global Problems

The Pratt and Whitney PW1100G-JM Geared Turbofan, commonly known as the GTF, was developed at a cost of approximately $10 billion as the next-generation engine for the Airbus A320neo family. The GTF offered significantly better fuel efficiency than the preceding CFM56 engines but suffered from persistent reliability problems from its early operational years. Airlines operating in hot and dusty environments, including Indian carriers, experienced accelerated engine degradation and higher removal rates than the engine’s design specifications had predicted.

In July 2023, Pratt and Whitney publicly disclosed a rare condition in the powdered metal used to manufacture certain high-pressure turbine disc and compressor components. The defect caused cracking in affected parts before they reached their intended operational life. This recall, initially covering 1,200 of the 3,000 PW1100G engines in service, was expanded in September 2023 to cover all 3,000 engines. The remediation process required each affected engine to be removed and inspected, a shop visit that P&W stated could take 250 to 300 days to complete. The global impact was severe: as of end-October 2025, approximately 835 GTF-powered aircraft were in storage globally, representing approximately one third of the entire GTF-powered fleet.

Go First’s Specific Grievance and the Numbers Behind It

Go First’s dispute with Pratt and Whitney predated the global 2023 recall disclosure by several years. According to a court filing Go First made before the US District Court of Delaware on April 28, 2023, engine unavailability forced the airline to ground part of its A320neo fleet for a total of 17,244 aircraft-days between January 2020 and February 2023. This amounted to more than 47 years of foregone flying time in aggregate. The breakdown: 30.5% of its neo fleet was grounded in 2020, 25.6% in 2021, and 33.9% in 2022. At the time of the May 2023 insolvency filing, 28 of its 54 aircraft were on the ground due to engine unavailability.

Go First alleged that P&W had failed to comply with an earlier arbitration award issued under the Singapore International Arbitration Centre rules in December 2022, which had directed P&W to supply 20 engines that were sitting at maintenance, repair, and overhaul (MRO) facilities. The airline’s management stated that if P&W had supplied the engines as ordered, Go First would have been able to return to full operations and would not have had to file for insolvency. The airline also estimated its losses from the engine crisis at Rs 10,800 crore in revenue lost and additional expenses incurred between 2020 and 2023.

Go First Fleet Status at Time of Insolvency Filing (May 2023)

Operational aircraft26 of 54 (48%)

Grounded aircraft (engine unavailability)28 of 54 (52%)

Pratt and Whitney’s Position

Pratt and Whitney disputed Go First’s characterisation consistently throughout the CIRP period. The company stated it was complying with the March 2023 SIAC arbitration ruling and that it continued to prioritise delivery schedules for all customers. P&W also stated that Go First had “a lengthy history of missing its financial obligations,” implying that the airline’s financial difficulties were not solely the product of engine unavailability. Internally, P&W’s representatives stated that engines due to be released from MRO facilities had already been committed to other customers before the arbitration award was announced, and that no spare leased engines were available.

The SIAC’s revised arbitration decision of July 5, 2023 modified the earlier emergency award, reducing the number of engines P&W was required to supply. On July 27, 2023, a US District Court judge denied Go First’s motion to enforce the earlier SIAC interim order, accepting that the arbitrator’s revised terms superseded the prior emergency award. Go First had sought $1.1 billion in damages from P&W across multiple jurisdictions. With the airline entering liquidation in January 2025, those claims became part of the liquidation estate’s assets to be pursued by the liquidator, Dinkar Venkatasubramanian.

Why the engine dispute created a structural collapse, not just a cash shortfall: Most airline financial distress can in principle be addressed through a combination of capacity reduction, fare increases, and fresh equity. Go First’s situation was different because the unavailability of engines did not just reduce revenue: it also meant the airline could not utilise aircraft it was paying lease rentals on. Paying full lease costs on grounded aircraft generates cash outflows with zero revenue offset. A grounded A320neo costs an airline approximately $300,000 to $400,000 per month in lease rentals and fixed costs regardless of whether it flies. With 28 aircraft grounded at the time of filing, Go First was absorbing an estimated $84 to $112 million in annual fixed costs on non-operational assets. No amount of fare revenue from the remaining 26 operational aircraft could offset this structural drain indefinitely.

Part IIIThe Section 10 Filing and the CIRP Process

Why Section 10 and Not Section 7 or 9

The IBC provides three main routes to initiate a Corporate Insolvency Resolution Process. Section 7 allows a financial creditor to file against a defaulting debtor. Section 9 allows an operational creditor to do the same. Section 10 allows the corporate debtor itself to file voluntarily when it has committed a default. Go First chose Section 10 for a specific reason: a voluntary filing by the corporate debtor allows it to request immediate interim protection, including a moratorium under Section 14, before creditors take adverse action. Given that lessors had already issued termination notices for lease agreements and the DGCA had received requests to deregister aircraft, Go First needed the moratorium to prevent the immediate removal of its fleet before any restructuring could be attempted.

The use of Section 10 by an airline was unprecedented in India at that point. Earlier airline insolvencies, including Kingfisher Airlines and Jet Airways, had involved creditor-filed petitions under earlier legal frameworks. Go First was the first airline to file for its own insolvency under the IBC, making it the first Indian airline CIRP and creating a template, and several unresolved legal questions, for all subsequent airline insolvency proceedings.

The financial creditor claims as admitted by the IRP: The IBBI published creditor list, last updated as of August 2, 2024, confirms three admitted financial creditors in the Committee of Creditors: Central Bank of India with admitted claims of Rs 1,934.42 crore (51.54% voting share), Bank of Baroda with admitted claims of Rs 1,744.52 crore (46.48% voting share), and IDBI Bank with admitted claims of Rs 74.46 crore (1.98% voting share). Total admitted financial creditor claims in the CoC were Rs 3,753.40 crore. The broader figure of Rs 6,521 crore cited in the original NCLT filing reflects total financial debts listed in the petition, including claims from Deutsche Bank and other parties that were either not admitted to the CoC or claimed under separate proceedings.

The IRP, the RP, and the Management Transition

When the NCLT admitted the petition on May 10, 2023, it appointed Abhilash Lal of Alvarez and Marsal as the Interim Resolution Professional. Lal took over management of the airline from the suspended board, directed public announcement of claims, and began the process of assessing Go First’s asset base and liabilities. The NCLT also directed that no employees be retrenched during the CIRP, a protection that the approximately 6,500 Go First employees at the time relied on for salary continuation during the proceedings.

On June 15, 2023, the NCLT approved the CoC’s appointment of Shailendra Ajmera, a partner at Ernst and Young, as the Resolution Professional to replace Lal. Ajmera oversaw the remainder of the CIRP, including the expression of interest process, the due diligence phase, the receipt of resolution plans, and ultimately the liquidation application before the NCLT. Ajmera was subsequently proposed as the Go First liquidator but the NCLT declined this, instead approving the CoC’s later nomination of Dinkar Venkatasubramanian for the liquidator role.

Go First Debt Structure at Time of CIRP Filing (May 2023)

Approximate creditor categories and estimated claim values. Source: NCLT filing, IBBI creditor lists, and Go First’s May 2, 2023 insolvency petition.

Part IVThe Aircraft Lessor Crisis and the Cape Town Convention

The most legally consequential aspect of the Go First CIRP was the conflict between the IBC’s moratorium provisions and the rights of aircraft lessors under international aviation financing law. This conflict exposed a major gap in India’s insolvency framework that persisted for nearly a year before partial resolution. The phases below present the sequence factually.

Phase 1: The Moratorium and Immediate Lessor Challenge (May 2023) May 2023

When the NCLT admitted Go First’s Section 10 petition on May 10, 2023, it automatically imposed a moratorium under Section 14(1) of the IBC. The moratorium prevents the transfer, disposal, or recovery of assets of the corporate debtor during the CIRP. Go First’s aircraft, although not owned by the airline but leased from foreign lessors, were treated by the NCLT as assets subject to the moratorium. The result was that the DGCA refused to process deregistration applications from lessors who had terminated their leases before or shortly after the insolvency commencement date.

Lessors including Pembroke Aviation, Accipiter Investments Aircraft 2, EOS Aviation, and SMBC Aviation filed writs before the Delhi High Court in May 2023, arguing that their leased aircraft were not Go First’s assets and therefore not subject to the moratorium. They also argued that India’s obligations under the Cape Town Convention, an international treaty governing interests in mobile equipment including aircraft, gave them an irrevocable right to repossess and deregister their property. The NCLT and NCLAT both initially upheld the moratorium, creating an impasse.

Phase 2: What the Cape Town Convention Actually Requires Legal Context

The Convention on International Interests in Mobile Equipment, concluded in Cape Town on November 16, 2001, is an international treaty that establishes a framework for the recognition of security interests in high-value mobile assets, primarily aircraft. India ratified the Convention and its Aircraft Protocol and incorporated them into Indian law through amendments to the Aircraft Rules, 1937. The treaty provides lessors and financiers with Irrevocable Deregistration and Export Request Authorisations (IDERAs), which are pre-authorisations that allow a lessor, as the sole authorised person, to have an aircraft deregistered by the relevant civil aviation authority regardless of any subsequent proceedings involving the airline.

The core purpose of the IDERAs is to protect aircraft lessors from being trapped in an insolvent airline’s estate. Without this protection, the cost of leasing aircraft to airlines in jurisdictions that do not honour lessor repossession rights is significantly higher, as lessors price the repossession risk into their lease rates. The Go First moratorium effectively negated the IDERAs that lessors held for their aircraft, raising concerns internationally about India’s compliance with the Cape Town Convention and resulting in the Aviation Working Group downgrading India’s risk profile for aircraft financing.

Phase 3: The MCA October 2023 Notification Oct 2023

On October 4, 2023, the Ministry of Corporate Affairs issued a notification clarifying that Section 14(1) of the IBC does not apply to transactions, arrangements, or agreements relating to aircraft, aircraft engines, airframes, and helicopters. This notification effectively brought India’s insolvency framework into alignment with its Cape Town Convention obligations by excluding aviation assets from the IBC moratorium.

The DGCA filed an affidavit before the Delhi High Court clarifying that the notification should apply to pending cases, including Go First, as well as to future proceedings. The Supreme Court and subsequent courts confirmed that the notification applied retrospectively to the ongoing Go First CIRP. However, even after the notification, practical export of aircraft from India proved difficult because of disputes over maintenance documentation, airworthiness certifications, and the physical logistics of moving grounded aircraft from Indian airports. Many lessors reported that their aircraft had deteriorated in condition due to long periods of storage without proper maintenance.

Phase 4: The Delhi High Court Order and Fleet Return (April 2024) Apr 2024

On April 26, 2024, the Delhi High Court issued a landmark judgment directing the DGCA to process deregistration applications for all Go First aircraft within five working days. The court invalidated DGCA communications from May 2023 that had suspended deregistration applications. It also directed the RP to provide current maintenance information to lessors, directed the Airport Authority of India to handle export and airworthiness communications, and barred the RP from accessing the aircraft going forward.

The deregistration of aircraft was completed by early May 2024. Lessors began recovering their aircraft, though many faced practical difficulties in exporting them due to maintenance deficiencies accumulated during the storage period. By end of December 2024, 28 aircraft had been deregistered and removed from India. With no aircraft available and no flyable fleet remaining, any possibility of restarting Go First as a going concern was effectively eliminated. The airline existed thereafter only as a legal entity in liquidation proceedings.

Part VThe Resolution Bids and Why They Failed

The Expression of Interest Process

The RP issued an Expression of Interest invitation with a submission deadline of September 28, 2023. Three entities initially expressed interest: a consortium of SpiceJet Managing Director Ajay Singh and EaseMyTrip co-founder Nishant Pitti through Busy Bee Airways, Sharjah-based Sky One Airways, and SpiceJet itself. SpiceJet’s own interest was later superseded by Singh’s personal bid in consortium with Busy Bee. The CoC set a revised financial bid deadline of January 31, 2024.

Two financial bids were received. Ajay Singh and Busy Bee Airways jointly bid Rs 1,600 crore, with Singh serving as the operating partner and Busy Bee as the investor. Sky One Airways, a UAE-based airline, submitted a second, lower bid, the amount of which was not disclosed but was described by lenders as below the Singh-Busy Bee offer. After pressure from lenders, the Singh-Busy Bee consortium raised its bid by Rs 100 to Rs 150 crore to approximately Rs 1,700 to Rs 1,750 crore. Even at the revised amount, the CoC found the bid far below acceptable levels given total admitted financial creditor claims of approximately Rs 3,753 crore and overall lender exposure of approximately Rs 6,200 crore.

Why no bid could have succeeded by the time bids were received: The fundamental problem with any Go First resolution plan was that by early to mid-2024, the airline had no flyable aircraft. The Delhi High Court’s April 2024 order directing fleet deregistration removed the single most valuable asset that any acquirer would have needed to restart operations. A successful resolution applicant would have had to simultaneously raise sufficient capital to satisfy creditor haircut requirements, procure a new fleet through new lease agreements, obtain fresh Pratt and Whitney engine supply or switch engine suppliers, rebuild the route network and slot portfolio, and rehire staff dispersed over a year of non-operation. The economic and operational complexity of this task, layered on top of a contested and uncertain engine supply environment, made any credible bid structurally unlikely. The Rs 1,600 crore bid represented approximately 26% of total admitted financial creditor claims, a haircut that the CoC concluded could not be justified when liquidation of remaining assets might yield comparable or better recovery.

The CoC Liquidation Decision

At its 37th meeting on July 23, 2024, the Committee of Creditors voted with 100% of voting shares to resolve that Go Airlines (India) Limited be liquidated. This was followed by a formal liquidation application before the NCLT. The CoC also nominated Dinkar Venkatasubramanian as the liquidator, a nomination the NCLT approved. Before approving the liquidation, the NCLT questioned whether it could also approve third-party funding for Go First’s arbitration proceedings against Pratt and Whitney at SIAC, and whether the existing RP could serve as liquidator. Both questions were resolved in favour of the new liquidator structure, with the P&W arbitration to be pursued by the liquidator as part of the liquidation estate’s assets.

Go First CIRP Timeline: Key Milestones (May 2023 to January 2025)

Duration of each phase from CIRP initiation to liquidation order. Source: NCLT orders, IBBI filings, and Delhi High Court judgments.

Part VILiquidation and What It Means for Creditors

The January 20, 2025 NCLT Order

On January 20, 2025, the NCLT bench comprising Judicial Member Mahendra Khandelwal and Technical Member Dr Sanjeev Ranjan passed the liquidation order against Go Airlines (India) Limited under Section 33 of the IBC. The order noted that the CoC had approved liquidation unanimously and that there was no legal or practical basis to interfere with the commercial wisdom of the CoC. Dinkar Venkatasubramanian was formally appointed as liquidator. The NCLT confirmed that the airline’s winding-up would proceed under the IBC’s liquidation provisions and that the NCLT would initiate steps to approach the appropriate court for formal dissolution in due course.

The NCLAT subsequently dismissed appeals against the liquidation order filed by Busy Bee Airways (the former bidder who argued liquidation was premature before its revised bid was considered), Bhartiya Kamgar Sena (representing employees), and individual aviation professionals. The NCLAT confirmed that the CoC had exercised its commercial wisdom appropriately and that the IBC does not permit courts to substitute their own commercial judgment for that of the CoC.

Creditor Recovery Expectations and the Waterfall

Under the IBC’s liquidation waterfall under Section 53, secured financial creditors rank ahead of unsecured financial creditors, who in turn rank ahead of operational creditors and trade creditors, and employees and workmen rank at a specific level depending on the nature of their claims. Go First’s primary assets available for liquidation include: the Wadia Group’s land and property pledged as collateral for the bank loans, slot entitlements and traffic rights (subject to regulatory disposition), airport deposits and security deposits, route and brand intellectual property, and the company’s claim against Pratt and Whitney in the ongoing SIAC arbitration.

Estimated Recovery Outlook by Creditor Class (Indicative)

Central Bank of India (Secured, Rs 1,934 cr admitted)Collateral-dependent

Bank of Baroda (Secured, Rs 1,744 cr admitted)Collateral-dependent

IDBI Bank (Secured, Rs 74 cr admitted)Collateral-dependent

Aircraft Lessors (Rs 2,660 cr lease dues)Aircraft recovered; residual claims uncertain

Operational Creditors (vendors, fuel suppliers)Lowest priority; minimal expected recovery

Passengers (refund claims)Operational creditors; minimal expected recovery

Note: Recovery percentages are indicative and not confirmed. Secured creditor recovery depends on the Wadia Group collateral valuation process currently underway. Lenders expected recovery in H1 FY2026. Aircraft lessors recovered their aircraft but may have residual claims for damages. Bar widths represent indicative relative recovery prospects, not absolute percentages.

The lenders, whose secured claims are backed by Wadia Group land and property as collateral, were reported to be expecting meaningful recovery in H1 FY2026. Collateral diligence was underway as of the liquidation order date. The Pratt and Whitney SIAC arbitration, in which Go First sought $1.1 billion in damages, is an asset of the liquidation estate. If the liquidator pursues and wins this arbitration, the proceeds would flow into the liquidation pool and improve creditor recoveries significantly. The arbitration is, however, a long-dated and uncertain asset.

Part VIIThe Structural Lessons for Indian Aviation and IBC Law

What the Go First Case Revealed About the IBC and Airlines

The Go First CIRP is significant not primarily as an aviation failure but as a legal stress test of the IBC’s architecture when applied to an airline. Four structural problems became visible.

The first was the moratorium-aircraft conflict. The IBC’s moratorium was designed for manufacturing and services companies whose assets are owned. Airlines lease most of their assets. Applying the moratorium to leased aircraft trapped both the lessors and the airline in a legal impasse that lasted eleven months before the October 2023 MCA notification and the April 2024 Delhi High Court order resolved it. During those eleven months, the grounded fleet deteriorated further in storage, reducing Go First’s value as a going concern and making revival progressively less feasible.

The second was the Cape Town Convention compliance gap. India had ratified the Convention but had not aligned its insolvency law with its treaty obligations. The Go First case forced the government to issue the October 2023 notification and prompted a broader legislative review. The Aviation Working Group’s downgrading of India’s risk profile had real commercial consequences: it signalled to global lessors that aircraft leased to Indian carriers could be trapped in insolvency proceedings, which increases lease costs for all Indian airlines.

The third was the going-concern problem specific to airlines. An airline’s value is almost entirely operational: routes, slots, passengers, crew, and brand all depend on the airline actually flying. Once Go First stopped flying on May 3, 2023, its going-concern value began depreciating rapidly. Every day of non-operation reduced the number of staff who would stay, the loyalty of passengers who would return, and the viability of the slot portfolio. The IBC’s 330-day maximum CIRP period, already long for most businesses, proved insufficient to resolve the legal complexity in time to preserve any going-concern value for Go First.

The fourth was the single-creditor committee problem. The Go First CoC had only three members, with Central Bank of India and Bank of Baroda together holding over 98% of voting shares. This concentration meant two institutions effectively controlled all decisions. While the legal framework permits this structure, it raises questions about whether a wider creditor representation, including operational creditors and lessors, might have produced different outcomes or earlier resolution.

What changed in Indian law as a result of Go First: The October 2023 MCA notification excluding aviation assets from the IBC moratorium was the most direct legislative response to the Go First case. The DGCA subsequently formalised clearer procedures for aircraft deregistration in insolvency situations. The Ministry of Civil Aviation and the Ministry of Corporate Affairs also began consultation on whether a specific insolvency framework for airlines, similar to those that exist in several other jurisdictions, was needed in India. The Aviation Working Group’s risk assessment of India improved after the Delhi High Court’s April 2024 order and the confirmed MCA notification, signalling that lessors’ repossession rights under the Cape Town Convention would be honoured in future Indian proceedings. These are structural improvements, though they came after, and partly because of, Go First’s collapse.

From GoAir’s Runway to Go First’s End: What the Case Actually Means

Go First’s collapse compresses three distinct stories into one 20-month proceeding. The first is the story of a well-run airline destroyed by an engine supply crisis it could not control. The 17,244 grounded aircraft-days, the unpaid lease rentals on non-flying aircraft, and the Rs 10,800 crore in estimated losses from engine unavailability are not abstract legal arguments: they represent real costs accumulated while P&W and Go First disputed who was responsible and what remediation was owed. Whatever the final arbitral determination, the operational damage was done well before the lawyers reached a verdict.

The second is the story of the IBC encountering an asset class it was not designed for. The code works well when the debtor owns its key assets. Airlines do not own their key assets: they lease them, and the lessors are international entities operating under an international treaty that India had ratified but not properly integrated into its insolvency framework. The result was eleven months of legal gridlock that consumed the airline’s residual value.

The third is the story of what happens when a resolution process outlasts the viability of the business it was designed to save. By the time bids were received in early 2024, Go First had no aircraft, no flying staff, no active routes, and no slot utilisation. The bidders who came were either financially constrained or operationally unready. The CoC’s unanimous liquidation vote was not a failure of imagination: it was a rational conclusion to an irresolvable situation. For India’s insolvency law, the Go First case is the most instructive airline stress test the system has yet faced, and its lessons are still being absorbed into legislative and regulatory reform.

Frequently Asked Questions

Section 10 of the Insolvency and Bankruptcy Code, 2016 allows a corporate debtor, meaning the company itself, to voluntarily file for initiation of the Corporate Insolvency Resolution Process when it has committed a default on a financial or operational debt. It differs from Section 7, where a financial creditor initiates proceedings, and Section 9, where an operational creditor files. A Section 10 voluntary filing allows the debtor to seek immediate interim protection, including the moratorium under Section 14, before creditors or lessors can take repossession or enforcement action.

Go First chose Section 10 specifically because aircraft lessors had already issued lease termination notices and were seeking to repossess and deregister its aircraft. The airline needed the moratorium to prevent the immediate loss of its fleet before any resolution attempt could be made. It was the first airline in India to use Section 10, making the Go First CIRP a precedent-setting case for how the IBC applies to the aviation sector.

The Cape Town Convention, formally the Convention on International Interests in Mobile Equipment concluded on November 16, 2001, is an international treaty that establishes a standardised legal framework for security interests in high-value mobile assets including aircraft. Its Aircraft Protocol provides lessors with Irrevocable Deregistration and Export Request Authorisations, known as IDERAs, which pre-authorise the lessor to have an aircraft deregistered by the national aviation authority and exported from the country regardless of any subsequent insolvency or legal proceedings involving the airline.

India ratified the Convention and its Aircraft Protocol and incorporated them into Indian law through the Aircraft Rules, 1937. In the Go First case, the NCLT’s moratorium under Section 14 of the IBC prevented the DGCA from processing deregistration applications, effectively negating the IDERAs that lessors held. This was widely seen as a breach of India’s Cape Town Convention obligations and prompted the Aviation Working Group to downgrade India’s risk profile for aircraft financing. The Government of India’s October 2023 MCA notification and the Delhi High Court’s April 2024 order subsequently restored lessor rights, but the conflict caused significant international concern about India’s reliability as a jurisdiction for aircraft leasing.

Go First’s total debt at the time of the CIRP filing was approximately Rs 6,521 crore to financial creditors and Rs 2,660 crore to aircraft lessors, with additional claims from operational creditors, employees, passengers, and vendors. The admitted Committee of Creditors comprised three financial creditors: Central Bank of India with admitted claims of Rs 1,934.42 crore and a 51.54% voting share, Bank of Baroda with admitted claims of Rs 1,744.52 crore and a 46.48% voting share, and IDBI Bank with admitted claims of Rs 74.46 crore and a 1.98% voting share. Total admitted CoC claims were Rs 3,753.40 crore.

Deutsche Bank was also listed as a financial creditor in the original petition. The airline’s promoters, the Wadia Group, had invested approximately Rs 6,500 crore into Go First since its inception, including Rs 3,200 crore in the three years before the filing and Rs 290 crore in April 2023 alone. These promoter infusions did not translate to recoverable creditor claims as they were equity, not debt.

Two financial bids were received. Ajay Singh, the Managing Director of SpiceJet, in consortium with Busy Bee Airways (whose majority shareholder was EaseMyTrip co-founder Nishant Pitti), bid Rs 1,600 crore, later revised upward to approximately Rs 1,700 to Rs 1,750 crore. Sharjah-based Sky One Airways submitted a lower, undisclosed bid. Both bids were rejected by the CoC as far below the minimum acceptable level given total creditor claims of approximately Rs 6,200 crore. Even the higher bid represented roughly a 73% haircut for secured financial creditors.

The deeper reason no viable bid emerged was operational: by early 2024, Go First had no aircraft (the fleet was being deregistered and returned to lessors), had not flown for over a year, had no active slots being utilised, and faced unresolved Pratt and Whitney engine supply uncertainty. Restarting the airline would have required a new fleet, new banking relationships, regulatory re-approvals, and staff recruitment. The combination of these requirements with the high level of legacy debt made a credible commercial bid structurally unlikely at any price the CoC would accept.

Passengers who purchased tickets and did not receive travel or refunds are classified as operational creditors of Go Airlines (India) Limited under the IBC. As operational creditors, they rank below secured financial creditors and workmen in the Section 53 liquidation waterfall. In practical terms, with total secured financial creditor claims of approximately Rs 3,753 crore and a liquidation asset base that is not expected to fully cover those secured claims, the realistic prospect of passenger refund recovery through the insolvency process is very limited.

Passengers should have submitted their claims to the Resolution Professional during the CIRP period in accordance with the public announcement made in May 2023. Claims not submitted within the notified period may be admitted later at the NCLT’s discretion. The DGCA separately required Indian airlines to provide refunds for cancelled flights, but with Go First having ceased all operations, the regulatory enforcement mechanism against the airline itself has limited practical effect for passengers seeking recovery.

Disclaimer: This article is for informational and educational purposes only and is current as of June 10, 2026. All facts, figures, and procedural details are sourced from NCLT and NCLAT orders, IBBI creditor lists and public announcements published on the IBBI website, the NCLT New Delhi Special Bench order dated May 10, 2023, Go Airlines (India) Limited’s petition before the US District Court of Delaware dated April 28, 2023, the Ministry of Corporate Affairs notification dated October 4, 2023, and the Delhi High Court judgment dated April 26, 2024. Pratt and Whitney’s positions are drawn from its public regulatory and arbitration disclosures. This article does not constitute investment or legal advice.

Go First Airlines: India’s First IBC Airline CIRP, the Pratt and Whitney Engine Crisis, and What Liquidation Means for Creditors