NEW DELHI: The cash-strapped Wadia Group- owned domestic carrier Go First Airways cancelled all flights for May 3 and 4 and has filed for the process of voluntary insolvency resolution before the National Company Law Tribunal in Delhi.
This was stated by Go First chief executive officer Kaushik Khona.
Khona rued this to be an unfortunate decision which had to be done to protect the interests of the company. “Go First is facing a financial crunch due to non-supply of engines by Pratt & Whitney, which has forced the company to ground 28 planes, which is over half of its fleet," he is reported to have said.
With over 3,000 people employed, the airline has already informed the government and is scheduled to submit a detailed report to the Directorate General of Civil Aviation, Khona added, saying that the suspended flights is likely to resume only after admission of its insolvency application is admitted.
In a statement issued on Tuesday afternoon, Go First said that this step was the result of the ever-increasing number of failing engines supplied by Pratt & Whitney, the American manufacturer. As of May 1, these failures had led to the grounding of 25 aircraft, the airline said.
A cash-and-carry model is used by Go First, which means that the airline pays oil marketing companies on a daily per flight basis. Now, it lacks funds to pay OMCs their dues, given the lack of flights.
Go First said in its statement that it had been 'forced' to apply for insolvency as Pratt & Whitney had 'refused to comply with an award issued by an emergency arbitrator'. The arbitrator had directed the company to supply 10 engines by April 27 and 10 more per month till the end of 2023.
The airline also said that, till now, Pratt & Whitney had 'failed to provide any further serviceable spare leased engines' citing the reason that there no spare leased engines are available at this time.
The failing airline has been unable to raise funds, since it posted its biggest annual loss in fiscal 2022. Reportedly, the owners Wadia Group were discussing either selling a majority stake with strategic partners or completely exiting the loss-making airline.
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