Indian budget airline Go First files for bankruptcy
May 3, 2023 01:39 PM
Debt-laden Indian budget airline Go First has filed for bankruptcy protection, blaming "faulty" engines from US aerospace company Pratt & Whitney for the grounding of about half its fleet.
Go First was India's fifth-biggest domestic carrier as of March, with 6.9 percent of the market share, according to government figures.
The carrier has been locked in a dispute with its exclusive supplier of engines for its Airbus A320neo fleet over issues it said had cost it $1.32 billion in lost revenues and additional expenses.
Its bankruptcy was a necessary step due to the "ever-increasing number of failing engines supplied by Pratt & Whitney's International Aero Engines", which had led to the grounding of 25 aircraft, Go First said in a statement on Tuesday.
It went on to accuse Pratt & Whitney of failing to comply with an arbitration order directing it to release spare leased engines that would have allowed a return to full operations.
The engine-maker said in a statement that it was complying with the arbitration ruling and was continuing "to prioritise delivery schedules for all customers".
Go First, owned by Indian conglomerate Wadia Group, said on its website that it had cancelled flights scheduled from May 3 to May 5 for "operational reasons".
Local media reports said Go First check-in counters were deserted at airports in New Delhi and other cities.
India's aviation sector is fiercely competitive, and several airlines have run aground due to some combination of poor management, overleveraging and adverse market conditions.
Full-service carrier Jet Airways collapsed in 2019 with $1.2 billion in debt after growing into one of the largest airlines in the country, leaving its 20,000 employees out of work.
Kingfisher Airlines closed in 2012 after it failed to repay loans worth millions of dollars to state-owned banks.
Its owner, beer tycoon Vijay Mallya, fled India four years later and battled his extradition from London to face financial fraud charges back home.
India's civil aviation minister Jyotiraditya Scindia said in a statement reported by local media that the government had been offering "every possible assistance" to Go First.