Why Did Go First Suspend Flights And File For Bankruptcy?

Its turbulent times ahead for Go First after the Wadia-owned airline on Tuesday suspended flight operations on May 3, 4 and 5 due to a "severe fund crunch", CEO Kaushik Khona said.

The airline has filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT), Khona told news agency PTI on Tuesday. Go First was forced to ground 28 planes (over half its fleet), Khona said, following which flights for May 3 and 4 were temporarily suspended.

Several flyers took to Twitter to air their grievances as the airline also cancelled or rescheduled several flights on Tuesday. One flyer, Shruti Shreya, told The Core that not only did her flight from Delhi to Bengaluru get cancelled but there was no option to reschedule it. She reached out to the airline's customer care but didn't get a response and is unsure whether she will be reimbursed. "In total, my loss is about 15k", Shreya said, citing her loss of a working day.

The Go First website currently states that a "full refund will be issued to the original mode of payment shortly," for those whose flights were cancelled.

The airline hit the massive snag following the non-supply of engines by aerospace manufacturer Pratt & Whitney. On May 1, Go First filed an emergency petition in a Delaware federal court in the United States seeking enforcement of two arbitral awards ordering Pratt & Whitney to provide serviceable engines without which "there is significant risk that Go First will go out of business and be forced to declare bankruptcy," the airline said, as per Law360.

Pratt & Whitney, an American aerospace manufacturer, is Go First's exclusive engine supplier for its Airbus A320neo aircraft fleet. The airline blamed Pratt & Whitney's "faulty engines" for the increase in its grounded aircrafts, as per Reuters.

"As the award recognized, Go First requires a minimum of 103 engines from Pratt for normal operations, yet only approximately 56 currently are serviceable," it said. As per the petition, the unavailability of Pratt engines has led to a "profound" decline in operating revenue per aircraft per month, causing a drop from $2.08 million in fiscal 2015 to $1.22 million in fiscal 2023.

Meanwhile, the Directorate General of Civil Aviation (DGCA) has issued a show cause notice to Go First after it announced cancelling flights for two days, as per reports.

Go First did not respond to The Core's request for comment at the time of writing this article.