National Company Law Appellate Tribunal (NCLAT) has upheld the order passed by the National Company Law Tribunal (NCLT), which admitted an application by Go First Airlines for the initiation of voluntary insolvency proceedings. The NCLAT rejected the plea filed by the lessors of Go First Airlines' aircraft to take possession of the aircraft.

The lessors of the aircraft, SMBC Aviation Capital Ltd, GY Aviation, and SFV Aircraft Holdings, had leased out 21 aircraft to Go First Airlines. They had approached the Directorate General of Civil Aviation (DGCA) for deregistration and repossession of the aircraft.

They argued that the aircraft lease had terminated before the moratorium was granted and, therefore, the moratorium could not impose a freeze on third-party assets.

However, the NCLAT directed the appellants to approach the adjudicating authority for further relief. This means that the lessors can seek further recourse through the appropriate legal channels.

Go First Airlines had moved the NCLT earlier to initiate the corporate insolvency resolution process under the Insolvency and Bankruptcy Code (IBC). The airline cited faulty engines supplied by Pratt & Whitney (P&W), an American company, as the reason for the grounding of its aircraft. They claimed that the grounding of aircraft increased from 31% in 2020 to over 50% in April 2023, resulting in a loss of over ₹10,800 crore for the company.

On May 10, the NCLT Delhi admitted the plea and declared a full moratorium for the company. The suspended board of directors of Go First Airlines was directed to cooperate with the Insolvency Resolution Professional (IRP) to ensure there are no layoffs.