Low-cost carrier Go First has filed for bankruptcy at the National Company Law Tribunal. The airline has also suspended its flight operations for three days – May 3, 4 and 5. It has cited mounting losses for its decision to file for bankruptcy. The airline has attributed the losses to delays in the delivery of Pratt and Whitney engines. It said that delay in delivery of the said engines has resulted in grounding of half its fleet of aircrafts.
Meanwhile, the directorate general of civil aviation (DGCA) has served a show cause notice to the airline for the sudden cancellation of flights without sharing prior information with it. The DGCA has also asked Go First to submit its plan of action for the resumption of flights. In a statement, the airline said that once the NCLT admitted its plea, the court would appoint an Insolvency resolution professional who would take over Go First’s operations.
“The grounding of close to 50% of its A320neo fleet due to the serial failure of Pratt & Whitney’s engines, while it continued to incur 100% of its operational costs, has set GO FIRST back by Rs 10,800 crore in lost revenues and additional expenses,” the airline’s statement said. Moreover, GO FIRST has paid Rs 5,657 crore to lessors in the last two years of which approximately Rs 1,600 crore was paid towards lease rent for non-operational grounded aircraft,” the airline added.
“GoFirst has been faced with critical supply chain issues with regard to its engines. The GoI has been assisting the airline in every possible manner. The issue has also been taken up with the stakeholders involved. Yet, it is unfortunate that this operational bottleneck has dealt a blow to the airline’s financial position,” union civil aviation minister Jyotiraditya Scindia said.