Airline files for insolvency, flights will resume once NCLT admits application, says CEO
Go First has grounded over 50 per cent of its fleet due to non-supply of Pratt & Whitney engines, resulting in fund woes. Pic/Twitter@GoFirstairways
Go First will temporarily suspend flights on May 3 and 4 amid severe fund crunch, the airline’s chief Kaushik Khona said on Tuesday. The airline has grounded 28 planes, more than half of its fleet, due to non-supply of engines by Pratt & Whitney (P&W), which has resulted in a fund crunch, he said.
Once the NCLT admits the application, the flights will be resumed, Khona said. “It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be done to protect the interests of the firm,” he said.
The Wadia group-owned carrier has also filed an application before the National Company Law Tribunal (NCLT), Delhi, for resolution and protection under Section 10 of the Insolvency and Bankruptcy Code “due to the ever-increasing failure of the P&W engines that power its fleet”, it said in a statement. The airline, which has been grappling with engine issues since January 2020, said it has been forced to move the NCLT, as P&W refused to comply with an order issued by the Singapore International Arbitration Centre.
The arbitrator had ordered P&W to take all reasonable steps to release and dispatch without delay to the airline at least 10 serviceable spare leased engines by April 27 and another 10 spare leased engines per month until December 2023, as per the statement.
“If P&W had followed the directions laid down in the award, Go First would have been able to return to full operations by August/September 2023 leading to Go First’s financial rehabilitation and survival. “Pratt & Whitney has failed to provide any further serviceable spare leased engines at all at the date of this press release and has stated that there are no further spare leased engines available,” the statement said.
The DGCA on Tuesday issued a show cause notice to Go First, for cancelling flights “without any prior intimation”.
“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 been asked to submit its response to the DGCA within 24 hours.
This story has been sourced from a third party syndicated feed, agencies. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability and data of the text. Mid-day management/mid-day.com reserves the sole right to alter, delete or remove (without notice) the content in its absolute discretion for any reason whatsoever