Go First Airways has suspended its flights for May 3 and 4.
The struggling and cash-strapped airline has also filed for insolvency proceedings, the equilvalent of Chapter 11 in India.
Go First has grounded more than half of its 61-plane fleet due to recurrent issues and the non-supply of engines from Pratt & Whitney according to Reuters.
The airline issued this statement:
Go Airlines (India) Limited (“GO FIRST”), India’s third largest airline, today filed an application with the National Company Law Tribunal (“NCLT”) Delhi for
resolution under section 10 of the Insolvency Bankruptcy Code (“IBC”).
GO FIRST has had to take this step due to the ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines, LLC, which has resulted in GO FIRST having to ground 25 aircraft (equivalent to approximately 50% of its Airbus A320neo aircraft fleet) as of May 1, 2023.
The percentage of grounded aircraft due to Pratt & Whitney’s faulty engines has grown from 7% in December 2019 to 31% in December 2020 to 50% in December 2022.
This is despite Pratt & Whitney making several on-going assurances over the years, which it has repeatedly failed to meet.
More precisely, GO FIRST has been forced to apply to the NCLT after Pratt & Whitney, the exclusive engine supplier for GO FIRST’s Airbus A320neo aircraft fleet, refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC). That order directed Pratt & Whitney to take all reasonable steps to release and dispatch without delay to GO FIRST at least 10 serviceable spare leased engines by April 27, 2023 and a further 10 spare leased engines per month until December 2023, with the objective of GO FIRST returning to full operations and achieving GO FIRST’s financial rehabilitation and survival.
If Pratt & Whitney 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. Despite the emergency arbitrator’s order, however, at the date of this press release, Pratt & Whitney has failed to provide any further serviceable spare leased engines at all, and has stated that there are no further spare leased engines available for it comply with the emergency arbitrator’s aware 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 has taken today’s step in order to protect the interests of all stakeholders. It has been forced to take this step despite the infusion of substantial funds to the tune of IN 3,200 crores by the promoters into the airline in the last three years, IN 2400 crores of which were injected in the last 24 months, and IN 290 crores in April 2023 alone. This brings the total promoter investment in the airline since its inception to approximately IN 6,500 crores.
GO FIRST has also received significant support from the Government of India’s exceptional Emergency Credit Line Guarantee Scheme, for which it is extremely grateful. However, even this collective and significant support has not sufficed to prevent the enormous damage caused by Pratt & Whitney’s defective and failing engines.