Go First, an Indian airline, cancels flights due to bankruptcy

After seeking bankruptcy protection, the Indian low-cost carrier Go First has decided to cancel its flight operations for the upcoming three days.

Impacted customers will receive a complete reimbursement, as stated by the airline. Go First is the first significant Indian carrier to file for bankruptcy since the collapse of Jet Airways in 2019.

A severe cash flow crisis was allegedly triggered by Go First’s grounding of numerous planes, which the airline claims was caused by US engine manufacturer Pratt & Whitney.

In a statement, Go First declared that the reason for taking this measure was the mounting number of faulty engines delivered by Pratt & Whitney.

As per Go First, around 50% of its Airbus A320neo fleet was grounded due to the issue, resulting in the company having to ground 25 aircraft. This, in turn, caused a loss of revenue and expenses amounting to approximately 108 billion rupees (£1 billion; $1.3 billion).

Furthermore, the airline alleged that Pratt & Whitney did not comply with an emergency arbitrator’s ruling that required the engine manufacturer to provide “a minimum of 10 operational spare leased engines by 27th April 2023.”

Pratt & Whitney has responded by stating that it is “abiding by the arbitration ruling of March 2023.” Since “this is now a legal matter,” the engine manufacturer has declined to make any further comments.

According to Jyotiraditya Scindia, India’s Minister of Civil Aviation, the government of India has been providing all possible support to the airline.

On 4 May, the National Company Law Tribunal has scheduled a hearing to consider Go First’s bankruptcy request.

The bankruptcy filing of Go First is anticipated to provide a chance for rival airlines, including Indigo, Air India, SpiceJet, and new competitors like Akasa Air, to acquire a bigger market share.

Industry experts suggest that although aviation stocks listed on India’s stock exchanges witnessed a surge on Tuesday, other airlines in the country are also grappling with engine and aircraft supply chain problems.

As per Cirium, an aviation analytics company, there are 102 commercial aircraft currently grounded in India. Out of these, 60 planes belonging to Go First and its competitor, Indigo, are grounded due to a shortage of spare parts.

The recent bankruptcy of Go First, which is a part of the Indian conglomerate Wadia Group, highlights the cut-throat competition in India’s airline industry.

Last year, two of India’s major carriers, Air India and Vistara, declared their intent to merge, making them the second and third largest airlines in the country.

The bankruptcy of Go First, which is a subsidiary of the Indian conglomerate Wadia Group, highlights the intense competition in India’s aviation industry.

In November of last year, Air India and Vistara, the second and third biggest airlines in India, respectively, revealed their intention to merge.

One of India’s largest airlines at the time, Jet Airways, was grounded in 2019 after grappling with over $1 billion (£800 million) in debt.

Despite undergoing a lengthy insolvency process, Jet Airways has yet to resume its operations.

Source : bbc.com

By Ryan

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