Go First Crisis: Broke Airline Cancels Flights, Files For Insolvency, Blames Pratt & Whitney Engines

Go First Airline: Facing a severe fund crunch, Go First, which has been flying for more than 17 years, has filed for insolvency while cancelling all its flights for three days.

Go First, which has been flying for more than 17 years, started domestic operations in India in 2005-06

Source : Getty

In a surprise move, Go First airlines, owned by Wadia-group, said on Tuesday that it was cancelling all its flights for three days -- May 3,4, 5 -- in view of a severe fund crunch. The sudden decision by the Mumbai-based low-cost airline, earlier known as Go Air, has left both passengers who had booked tickets as well as crew members in lurch.

The development 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.

"Due to operational reasons, GoFirst flights for May 3,4,5 2023 have been cancelled. We sincerely apologise to our loyal customers. We assure that we'll be back with more information soon," Go First said in a statement. The airline operates around 180-185 flights daily.

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.

READ | Go First Airways Files For Insolvency, Blames 'Serial Failure' Of Pratt & Whitney Engines

What Is The Go First Crisis? Here Is All You Need To Know

• Go First, which has been flying for more than 17 years, has filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT), saying it was facing a severe financial crunch.
• The airline said that the customers who have booked the flights for the mentioned dates will be eligible for a full refund.
• 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.
• The percentage of grounded aircraft due to Pratt & Whitney's faulty engines has grown from seven per cent in December 2019 to 31 per cent in December 2020 to 50 per cent in December 2022, the airline said.
• The airline's sudden decision to cancel flights invited a show cause notice from the Directorate General of Civil Aviation (DGCA). "Since Go First has failed to adhere to the approved schedule leading to passenger inconvenience, this is non-compliance with the condition for approval of the schedule. The airline has been called upon to show cause as to why suitable action should not be initiated against the airline for the aforesaid violation," it said.
• Go First has also been directed to submit details of the steps taken to mitigate the inconvenience caused to the passengers booked on the cancelled flights and submit a plan of action to operate flights from May 5 onwards.
• Currently, the airline, which has around 5,000 employees, has liabilities of nearly Rs 9,000 crore. The airline reported a loss of Rs 1,800 crore, including an Rs 800 crore notional loss due to accounting standards in the financial year ended March 2023.
• Civil Aviation Minister Jyotiraditya Scindia said Go First has been faced with critical supply chain issues with regard to their engines and that the government has been assisting the airline in every possible manner.
• The flight cancellation invited angry reactions from passengers, who vented out on the airline through Twitter. "Our flight was cancelled suddenly. They should have given us another flight. They are telling us that they will give us the refund after 7 days," ANI quoted a passenger as saying.