Low-cost carrier Go First on Tuesday filed for bankruptcy with the National Company Law Tribunal (NCLT), citing the ever-increasing failure of Pratt & Whitney engines that power its fleet.
Go First says it has grounded 25 aircraft as of May 1, or around 50% of its Airbus A320neo fleet, due to 'failing engines' supplied by Pratt & Whitney's International Aero Engines.
The grounding of close to 50% of the airline's A320 neo fleet due to the 'serial failure' of Pratt & Whitney engines has set the airline back by ₹10,800 crore in lost revenues and additional expenses, Go First says in a statement.
"The percentage of grounded aircraft due to Pratt & Whitney's faulty engines has grown from 7% in December 2019 to 31% in December 2020 to 50% in December 2022. This is despite Pratt & Whitney making several on-going assurances over the years, which it has repeatedly failed to meet," the Wadia Group-owned budget carrier says.
The airline says it has been forced to apply to the NCLT after engine supplier Pratt & Whitney refused to comply with an award issued by an emergency arbitrator appointed by the Singapore International Arbitration Centre (SIAC). That order directed Pratt & Whitney to release and dispatch without delay at least 10 serviceable spare leased engines to Go First by April 27, 2023, and a further 10 spare leased engines per month until December 2023.
"If Pratt & Whitney were to comply with the orders in the emergency arbitrator's award, Go First would be able to return to full operations by August/September 2023. Despite the emergency arbitrator's order, however, at the date of this press release, Pratt & Whitney has failed to provide any further serviceable spare leased engines at all, and has stated that there are no further spare leased engines available for it comply with the emergency arbitrator's award," the low-cost airline says.
The no-frills carrier has 'temporarily' cancelled all flights on May 3 and 4.
"GO FIRST deeply regrets the disruption and inconvenience that this will cause to its customers, travel partners, creditors, and suppliers and, in particular, to its own employees who have remained loyal to and grown with GO FIRST over the years," the Wadia-owned carrier says, adding it has taken this step in order to protect the interests of all stakeholders.
Go First says it has been forced to suspend operations despite the infusion of ₹3,200 crore by the promoters into the airline in the last three years, ₹2,400 crore of which were injected in the last 24 months, and ₹290 crore in April 2023. The total promoter investment in the airline since its inception stands at around ₹6,500 crore.
However, even this collective and significant support has not sufficed to prevent the enormous damage caused by Pratt & Whitney's 'defective' and 'failing' engines, the airline says.