Cash-strapped Go First files for insolvency, cancels May 3, 4 flights

Go First airline will stop flights on Wednesday and Thursday(May 3 & 4) due to a severe funds shortage. Only 50 per cent of the airline's fleet is operational due to not getting spare engines from US firm Pratt & Whitney (P&W) which has resulted in Go First having to ground 25 aircraft (equivalent to approximately 50 per cent of its Airbus A320neo aircraft fleet)." the carrier said in a statement. The carrier, owned by the Wadia Group, has also filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal in Delhi.

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. The airline - which employs over 3,000 people - has already informed the government and will submit a detailed report to the Directorate General of Civil Aviation, while suspended flights will resume only after its insolvency application is admitted, CEO Kaushik Khona.  The airline said these failures had led to the grounding of 25 aircraft as of May 1.

Go First operates on a cash-and-carry model - which means it pays oil marketing companies daily per flight it operates - and, given the lack of flights, it lacks funds for OMCs their dues. The airline today said 'substantial funds' - Rs 3,200 crore - had been made available over the past 36 months; Rs2,400 crore was injected in the last 24 and Rs 290 crore in April alone. Reuters reports the Wadia Group is reluctant to invest any more till the P&W issue is resolved.