Cash-Strapped Go First Cancels All Flights Till May 12, Full Refund To Be Issued

Go First Flights: The budget airline said a full refund would be issued to passengers who booked flights to the original mode of payment.

Go First airlines, earlier known as Go Air, has filed for voluntary insolvency resolution proceedings

Cash-strapped budget airline Go First announced on Friday cancellation of all its flights until May 12, 2023, "due to operational reasons". The airline, which has been flying for more than 17 years, has also suspended the sale of tickets till May 15.

"We regret to inform that due to operational reasons, Go First flights scheduled till May 12, 2023, have been cancelled," read the official statement. The statement further said that a full refund would be issued to the original mode of payment shortly.

As several passengers vented their ire on social media, aviation regulator DGCA ordered the airline to process refunds under the prevailing regulations.

Earlier this week, Go First filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT), saying it was facing a severe financial crunch.

The airline said more than half of its fleet was grounded due to the non-availability of engines from US firm Pratt & Whitney (P&W), which powers its Airbus A320 neo aircraft. Go First has grounded 25 aircraft, or 50 per cent of the fleet. This has directly led to a funds crunch.

READ | Go First Bankruptcy: Promoter Wadia Group Considering One-Time Settlement Offer, Says Report

The airline, owned by the Wadia group, has liabilities worth Rs 11,463 crore. The airline has sought voluntary insolvency resolution proceedings as well as an interim moratorium on financial obligations.

On Thursday, the NCLT reserved its order even as aircraft lessors opposed the airline's plea and sought the deregistration of 20 aircraft operated by Go First.

The DGCA had issued a show cause notice to the carrier for the sudden cancellation of flights, which was initially till May 5. It was later extended to May 9 and now till May 12.

After examining the reply filed by Go First to the show cause notice, the DGCA on Thursday said it had issued an order "under the prevailing regulations directing them to process the refunds to passengers as per the timelines specifically stipulated in the relevant regulation".

The budget airline started domestic operations in India in 2005-06, with the first flight from Mumbai to Ahmedabad. International operations were launched in 2018-19. The airline operates around 180-185 flights daily.

The crisis marks the collapse of another airline in India after the failure of Jet Airways. Jet Airways has been grounded since 2019 due to financial issues.