Cash-strapped Indian airline Go First Airways filed for insolvency proceedings with the National Company Law Tribunal on Tuesday, blaming Pratt & Whitney engines for the grounding of about half its fleet.<\/p>\n
The insolvency filing marks the first major airline collapse in the country since Jet Airways filed for bankruptcy in 2019, and underscores the fierce competition in the sector.<\/p>\n
Go First\u2019s filing comes after Pratt & Whitney, the exclusive engine supplier for the airline\u2019s Airbus A320neo aircraft fleet, refused to comply with an order to release engines to the airline that would have allowed it return to full operations, the company said.<\/p>\n
\u201c…in the absence of Pratt & Whitney not providing the required number of spare leased engines in accordance with the order issued by the emergency arbitrator, Go First is no longer in a position to continue to meet its financial obligations,\u201d the airline said.<\/p>\n
Pratt & Whitney, a Raytheon Technologies (RTX.N) unit, was not immediately available for comment.<\/p>\n
Local media reported that Go First had suspended its flights for May 3 and 4.<\/p>\n
Go First\u2019s lenders were unaware of the airline\u2019s plan to file for voluntary insolvency, two bankers aware of the matter told Reuters.<\/p>\n
The lenders met Go First\u2019s management a few weeks ago, but no intimation was given, said one of the bankers. Lenders will meet shortly to assess the situation and decide on the future course of action, they said.<\/p>\n
The number of grounded aircraft due to the engine issue increased from 7 per cent of its fleet in December 2019 to 31 per cent in December 2020 and 50 per cent in December 2022, the airline said.<\/p>\n
The groundings cost Go First 108 billion rupees ($1.32 billion) in lost revenues and additional expenses, it said.<\/p>\n
The grounded flights resulted in Go First\u2019s market share falling to 6.9 per cent in March from 8.4 per cent in January, latest data from the Indian aviation regulator showed.<\/p>\n
\u201cI am a little stunned to hear of them file for bankruptcy and proceed for IBC,\u201d said Mark Martin, CEO at aviation consultancy Martin Consulting LLC. \u201cI still feel that this might not be the end of GO First. This must be a vehicle and a means for somebody new to take over.\u201d<\/p>\n
Martin blamed 80 per cent of Go First\u2019s financial woes on Pratt & Whitney and said it was not a case of mismanagement by promoters.<\/p>\n
The airline was seeking to raise funds and Indian conglomerate Wadia Group was reported to be in talks to either sell a majority stake or completely exit its shareholding.<\/p>\n
\u201cThe additional consequence of Pratt & Whitney\u2019s actions has also driven some lessors to repossess aircraft, draw down letters of credit and notify further withdrawal of aircraft,\u201d the airline said.<\/p>\n
Source-Khaleej Times<\/p>\n","protected":false},"excerpt":{"rendered":"
Cash-strapped Indian airline Go First Airways filed for insolvency proceedings with the National Company Law Tribunal on Tuesday, blaming Pratt & Whitney engines for the grounding of about half its fleet. The insolvency filing marks the first major airline collapse in the country since Jet Airways filed for bankruptcy in 2019, and underscores the fierce […]<\/p>\n","protected":false},"author":16,"featured_media":127937,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,20],"tags":[],"class_list":["post-127936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-india"],"yoast_head":"\n