Go First Airlines has filed for insolvency and cancelled flights due to an increasing number of failures of Pratt & Whitney Engines, resulting in the grounding of over half of its A320neo jets.
Concerns for the future of the cash-strapped carrier have been raised as the airline announced that it would be suspending all flights from May 3 to 5 as the airline is no longer in a position to continue to meet its financial obligations.
The airline previously known as GoAir was rebranded as Go First ahead of a planned initial share sale last year. The Indian ultra-low-cost carrier said that it had filed voluntary insolvency resolution proceedings with the National Company Law Tribunal in Delhi due to the ever-increasing number of failing engines supplied by Pratt & Whitney International. It blamed the engine manufacturer for the failure of the engines forcing the airline to ground almost half of its fleet as demand for travel surged.
“Go First deeply regrets the disruption and inconvenience that this will cause to its customers, travel partners, creditors, and suppliers, and in particular, to its own employees who have remained loyal to and grown with Go First over the years.”Go First Airline
“However, even this collective and significant support has not sufficed to prevent the enormous damage caused by Pratt & Whitney’s defective and failing engines,” the airline continued.
Go First further stated that the engine manufacturer refused to comply with an award issued by an emergency arbitrator to provide the carrier with at least ten usable engines by April 27, and an additional ten per month until December 2023. However, Pratt & Whitney disputed the claim, saying it was complying with the arbitration ruling.
“Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers,” said Pratt & Whitney spokesperson.
According to the airline, the partial grounding due to the serial failure of Pratt’s engines has cost the airline INR 108 billion ($1.3 billion) in lost revenue and additional expenses. The airline owes financial creditors INR 65.21 billion ($798 million) and has total liabilities to all creditors of INR 114.63 billion including dues to banks, financial institutions, vendors and aircraft lessors, according to its bankruptcy filing.
The insolvency filing of Go First highlights the intense competition in India’s airline industry and is the first major collapse since Jet Airways filed for bankruptcy in 2019.
The airline has a fleet of 59 aircraft, including 54 A320neo and five A320, and flies to 34 cities, including seven international destinations. The grounding of almost half of its fleet caused Go First’s market share in India’s domestic aviation industry to fall to 6.9% in March from 8.4% in January.
Moreover, the grounding and related issues also led to the airline delaying plans to go public. In March 2023, the airline had the lowest on-time performance of all Indian airlines, with a punctuality rate of 49.2%.
Feature Image via Twitter FlightMode