- Saturday, March 01, 2025
By: Shubham Ghosh
India’s cash-strapped low-cost airlines Go First has cancelled all flights for Wednesday (3) and Thursday (4) and has been ‘forced’ to file for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT) in Delhi which adjudicates issues related to Indian companies.
Go First chief executive Kaushik Khona confirmed the news to the PTI.
“It is an unfortunate decision… but it had to be done to protect the interests of the company,” he said, adding, “Go First is facing a financial crunch due to non-supply of engines by Pratt & Whitney (P&W), which has forced the company to ground 28 planes, which is over half of its fleet.”
The airline, which employs more than 3,000 people, has already informed the government about the situation and will submit a detailed reported to India’s civil aviation regulator Directorate General of Civil Aviation, while suspended flights will resume only after its insolvency application is submitted, the CEO told the PTI.
In a statement issued on Tuesday afternoon, Go First said it ‘had to take this step due to the ever-increasing number of failing engines’ supplied by US manufacturer Pratt & Whitney.
According to the airline, these failures saw grounding of 25 aircraft as of Monday (1).
Promoters have infused funds worth Rs 3,200 crore (£313.2 million) into the airline in the last three years and out of the total amount, Rs 2,400 crore (£234.9 billion) was injected in the last 24 months. An amount of Rs 290 crore (£28.3 million) was pumped in April this year.
“This brings the total investment in the airline since its inception to approximately Rs 6,500 crore (£636.2 million),” the statement said.
Further, Go First said it has received significant support from the government’s Emergency Credit Line Guarantee Scheme.
“Even this collective and significant support has not been adequate to prevent the enormous damage caused by Pratt & Whitney’s defective engines.
“The grounding of close to 50 per cent of its fleet due to the serial failure of Pratt & Whitney’s engines, while incurring 100 per cent of its operational costs has set Go First back by Rs 10,800 crore (£1.05 billion) in lost revenues and additional expenses,” it said.
According to the airline, it is no longer in a position to continue to meet its financial obligations and has taken the step to approach the NCLT “to protect the interests of all stakeholders”.
In April, Reuters reported the carrier’s owners Wadia Group were in talks with strategic partners to either sell a majority stake or exit the loss-making firm completely.
Go First later denied rumours it would exit the aviation business.
A senior airline official told news agency ANI there were ‘no plans to shed stake or exit the aviation business’ and that the promoters were ‘committed to the business and are infusing further funds…’
(With agency inputs)
