GO FIRST FILES FOR BANKRUPTCY, SUSPENDS FLIGHTS

 Go First was an Indian ultra- low- cost airline services. It was based in Mumbai, Maharashtra. Go First started its operation on Nov 4, 2005. India’s Wadia Group is the owner of this airlines. But now this Low-cost carrier has filed for bankruptcy at the National Company Law Tribunal (NCLT), seeking voluntary insolvency resolution proceedings. And they have even cancelled their flights till May 12. According to a Go First official, the financial crunch that the company facing is due to non-supply of engines by US- based jet engines manufacturer Pratt and Whitney (P&W) which caused the grounding of more than 50 planes. This caused Go First to set back by 10800 crore rupees in lost revenues and additional expenses. In the last two years Go First has paid 5657 crore rupees to lessors. Also, the grounding of its aircraft, that started in 2019, grew from 7% of its fleet to 31% 2020 December, to 50% by 2022 December.

                                                 The current situation is getting worse because of the P&W’s refusal to take steps for the immediate release of 10 leased engines by April 2023 and another 10 engines by December 2023. The airline pointed out that if the engines were made available, it would have returned to full operations by August or September of 2023.The lessors of Go First opposed the airline’s plea to admit insolvency in the Delhi bench of NCLT. The Directorate General of Civil Aviation (DGCA)’s stand on this situation is made clear by asking the airline to refund passengers who have booked tickets for cancelled or suspended flights. The DGCA’s statement came after the airline filed the insolvency citing the cash crunch. Go First’s CEO Kaushik Khona told that the insolvency proceedings are done for reviving the airlines, and not for selling it. This chaotic atmosphere faced by the Wadia Group owned airlines reminds of the situation in 2019, when Jet Airways went bust. The leasing companies have repossessed some of Go First’s leased planes because of the non- payment of the rental dues. Though there were consistent investments from the Wadia Group and also emergency credit line from the government, the airlines failed in operation.