Go First, previously known as GoAir, has been granted relief by the National Company Law Tribunal (NCLT) by admitting its voluntary insolvency plea. This major relief has granted the airline protection from recoveries by lenders and lessors.

The NCLT has directed the initiation of insolvency proceedings against Go First, and has appointed Abhilash Lal, the Insolvency Resolution Professional (IRP), to maintain the airline's status as a going concern.

Go First had been arguing that the grounding of 28 planes, which constituted 50 percent of the Airbus A320Neo planes, was due to faulty engines supplied by Pratt and Whitney. The airline also accused the engine maker of refusing to comply with an Emergency Arbitrator award directing them to supply 10 engines by April and another 10 by December 2023.

Also read: Go First crisis: SMBC Aviation appeals against NCLT moratorium on airline's lessors

The crisis has brought to light the major issue of Pratt & Whitney engines in the aviation industry, with IndiGo also experiencing similar problems in the past.

The NCLT's decision to grant a moratorium in favor of Go First is a landmark judgment for the Insolvency and Bankruptcy Code (IBC). Mark Martin, CEO of Martin Consulting, believes that this ruling shows that NCLT does not want the airline to sink and instead wants to keep it afloat.

Martin advises that lessors should hold on, wait, and stay invested in Go First. Martin also believes that Pratt & Whitney needs to be held accountable for the crisis that has occurred.

Speaking to CNBC-TV18, Martin said, "This is a landmark judgment for the IBC and NCLT court to pass an order in favor of a moratorium. It suggests that there is a bigger thought of not letting GoAir sink and collapse. The whole idea is to keep GoAir afloat, keep them running, keep them functioning, because if they go belly up, then we are talking about 17,000 jobs at stake, we are talking about the government losing on GST and VAT revenue."

Also Read: Tata and IndiGo in race to acquire Go First's aviation assets: Report

"Nearly 30 Go First aircraft out of 56 are parked in airports across the country without engines. The Pratt & Whitney engine problem is not just for Go Air, you also got Lufthansa, United Airlines, airBaltic, Swiss Air, JetBlue, Nippon Airways, Hong-Kong Express the list is endless. So lessors just need to bite the bullet, hold on, wait and stay invested in GoAir that is the most important part point I want to raise," Martin added.

Former Director General of Civil Aviation, MR Sivaraman, believes that airlines need to find a solution on managing their engine purchases in the future. He added that the aero engine market is controlled by GE, Pratt & Whitney, Safran, and Rolls-Royce.

According to Sivaraman, the IRP has been tasked with looking into the financial strength of Go First and determining whether the aircraft that are functional can be flown in a commercially viable manner.

Although the earlier management of Go First has been suspended, the NCLT has directed that none of the employees are to be laid off. The Go First management has been asked to deposit Rs 5 crore with the resolution professional to meet expenses. Go First CEO Kaushik Khona welcomed the order and called it a historic judgment in terms of the pace of proceedings.

Also Read: DGCA gets new requests to de-register 9 Go First planes, takes total to 45 aircraft