This Article is From May 06, 2023

Broke Go First Stops Flights, Blames US Engine-Maker For Troubles

Go First said it had to stop flights "due to the ever-increasing number of failing engines supplied by P&W International Aero Engines, which has resulted in Go First having to ground 25 aircraft, or 50 per cent of its Airbus A320neo fleet"

Go First will temporarily suspend flights on May 3 and 4 due to fund crunch


Go First airline will stop flights from Wednesday to Friday due to a severe funds shortage. Only 50 per cent of the airline's fleet is operational as it is not getting spare engines from US firm Pratt & Whitney (P&W), the carrier said in a statement.

Following the announcement, the aviation regulator DGCA sent notice to Go First for not informing it prior to cancelling all scheduled flights and asked for a reply within 24 hours. Airlines have to tell the regulator they intend to cancel all scheduled flights before doing so, otherwise it would be a violation of the Civil Aviation Rules.

Go First said it had to stop flights "due to the ever-increasing number of failing engines supplied by P&W International Aero Engines, which has resulted in Go First having to ground 25 aircraft (50 per cent of its Airbus A320neo fleet)."

The carrier, owned by the Wadia Group, has also filed for insolvency before the National Company Law Tribunal in Delhi.

"It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be done to protect the interests of the company," Go First chief executive Kaushik Khona told news agency PTI.

Go First has grounded 25 aircraft, or 50 per cent of the fleet, as on Monday. This has directly led to a funds crunch as not having enough aircraft flying dries up earnings very fast in the aviation sector.


Go First has filed for insolvency with the NCLT

The airline in the statement said a Singapore arbitrator ordered P&W to supply at least 10 serviceable spare leased engines by April 27, 2023 and 10 more engines - one each per month - by December this year. But P&W has not followed the order, the airline alleged.

"... That order (of the arbitrator) directed P&W to take all reasonable steps to release and dispatch (the engines) without delay to Go First..." the airline said. "If P&W were to comply with the orders in the emergency arbitrator's award, Go First would be able to return to full operations by August-September 2023," the airline said.

Go First said the American aviation firm told them there are no further spare leased engines available for P&W to comply with the emergency arbitrator's award.

Responding to the claim, the US firm said, "Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. P&W is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further. "

Civil Aviation Minister Jyotiraditya Scindia confirmed that the airline has been facing critical supply chain issues with the engines, adding the government has been helping the airline in every possible way.

"It is unfortunate that this operational bottleneck has dealt a blow to the airline's financial position. It has come to our knowledge that the airline has applied to the NCLT. It is prudent to wait for the judicial process to run its course," Mr Scindia said in a statement.


Go First said it has grounded 50 per cent of its fleet

Go First's promoters added substantial funds up to Rs 3,200 crore into the airline in the past three years. Of this, Rs 2,400 crore was injected in the past 24 months, and Rs 290 crore in April this year alone. All these bring the total promoter investment in the airline since its inception to approximately Rs 6,500 crore.

The airline's market share fell from 10.8 per cent in fiscal 2021 to 8 per cent in fiscal 2023.

Some people who have booked Go First told NDTV they have received auto-generated emails about flight cancellations due to "operational issues".

The airline said it has told the government about the situation and will send a report to the regulator Directorate General of Civil Aviation (DGCA).

The airline employs over 5,000 people.

On its website, the airline said its fleet has 59 aircraft, of which 54 are A320neo and five are A320ceo.