GoFirst will temporarily suspend flights on May 3 and 4 due to lack of funds
Mumbai:
GoFirst airline will stop flying on Wednesday and Thursday due to severe lack of funds. The carrier said in a statement that only 50 per cent of the airline’s fleet is operational as it is not getting spare engines from US firm Pratt & Whitney (P&W).
Following the announcement, aviation regulator DGCA sent a notice to GoFirst for not informing it before canceling all scheduled flights and sought a reply within 24 hours. Airlines will have to inform the regulator before doing so that they want to cancel all scheduled flights, otherwise it will be a violation of civil aviation rules.
GoFirst said it had to stop flying “because ever-increasing number of failed engines supplied by P&W International Aero Engines, resulting in Go First having to ground 25 aircraft (50 percent of its Airbus A320neo fleet).”
The Wadia Group-owned carrier has also filed for bankruptcy before the National Company Law Tribunal in Delhi.
“It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be taken to protect the interests of the company,” GoFirst chief executive Kaushik Khona told news agency PTI.
GoFirst has grounded 25 aircraft, or 50 percent of the fleet, on Monday. This has directly led to a shortage of funds as the earnings in the aviation sector are declining rapidly due to not having enough aircraft.
The airline said in a statement that a Singapore-based arbitrator ordered P&W to supply at least 10 serviceable spare leased engines by April 27, 2023, and 10 more engines – one each month – by December this year. but p&w order not obeyedthe airline alleged.
“… that order (of the arbitrator) directed P&W to take all appropriate steps to release and dispatch (the engine) without further delay…” the airline said. “If P&W follows the orders in the emergency arbitrator’s award, GoFirst will return to full operations by August-September 2023,” the airline said.
GoFirst said the US aviation firm told them there were no additional leased engines available for P&W to comply with the emergency arbitrator’s award.
The promoters of GoFirst have infused substantial funds of up to Rs 3,200 crore in the airline in the last three years. Of this, Rs 2,400 crore was infused in the last 24 months and Rs 290 crore in April this year. All these bring the total promoter investment in the airline since its inception to around Rs 6,500 crore.
The airline’s market share is expected to fall from 10.8 per cent in FY2021 to 8 per cent in FY2023.
Some people who booked GoFirst told NDTV that they received auto-generated emails about flight cancellations due to “operational issues”.
The airline said it has informed the government about the situation and will send a report to the regulator Directorate General of Civil Aviation (DGCA).
The airline employs over 5,000 people.
On its website, the airline said it has 59 aircraft in its fleet, of which 54 are A320neo and five are A320ceo.