Go First Files For Voluntary Insolvency Proceedings, Blames Pratt & Whitney For Woes; US Engine Maker Hits Back

Amid mounting financial pressures caused by repeated engine failures, Go First, part of the Wadia group, has filed for voluntary insolvency proceedings with India's National Company Law Tribunal (NCLAT).

The airline, dependent on Pratt & Whitney's International Aero Engines for its fleet of Airbus A320neo aircraft, has had 25 planes grounded due to engine issues, or half of its total fleet.

The low-cost airline claimed that P&W did not fulfill its contractual obligations and refused to abide by an arbitration award in the matter. It added that with more engine failures expected over the next three to four months, the airline's operations would have become unviable.

Meanwhile, the US engine maker has said that the airline has a “lengthy history of missing its financial obligations” to P&W and added that it was "complying with the March 2023 arbitration ruling related to Go First".

If Go First’s application is processed by NCLT, an interim resolution professional (IRP) will be appointed to operate the carrier.

"Go First’s board and management will cooperate fully with the IRP and trusts that the IRP will address the concerns of Go First’s stakeholders as appropriate,” the carrier said, reports Indian Express.

In the meantime, the airline has also suspended its flights scheduled for 3 to 5 May due to a severe cash crunch, which is a result of the widespread grounding of its aircraft, the Press Trust of India reported quoting Go First’s Chief Executive Officer Kashik Khona.

After Jet Airways, Go First is the second Indian airline to approach NCLAT under the Insolvency and Bankruptcy Code.

Amidst recent developments, Go First was issued a show cause notice by the Directorate General of Civil Aviation (DGCA) due to the cancellation of all its scheduled flights on 3 and 4 May.

The DGCA stated in the notice that the airline failed to give written notice to the regulatory body regarding the cancellations, which made it non-compliant with existing norms.

In addition to this, the regulator asked the airline to provide a list of measures undertaken to alleviate the inconvenience caused to their passengers, as well as a viable plan of action to operate all scheduled flights for May 5.

According to the airline, Go First has been facing the problem of grounded aircraft due to Pratt & Whitney's defective engines since January 2020.

Despite various commitments made by the US engine maker over the years, it has repeatedly failed to meet them, the company said.

The percentage of grounded aircraft has gone from 7 per cent in December 2019 to 31 per cent in December 2020 and further increased to 50 per cent in December 2022, it added.