Flights Suspend: Cash-strapped airline Go First has filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal, informed the company’s CEO Kaushik Khona.
Go First flights will also be suspended for three days – May 3, 4 and 5 – as it has been facing a severe fund crunch, Khona told news agency PTI.
Kaushik Khona said the Wadia group-owned airline has grounded around 28 planes, which make up more than half of its fleet, due to the non-supply of engines by Pratt and Whitney (P&W). This has resulted in a fund crunch.
Go First has sued P&W in US federal court, seeking to enforce an arbitral award that asks the engine maker to supply the airline.
The grounded flights have led to Go First’s market share falling to 6.9 per cent in March from 8.4 per cent in January, according to the latest data from the Indian aviation regulator.
The airline posted its biggest annual loss in fiscal 2022.
“It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be done to protect the interests of the company,” Khona was quoted as saying by the news agency.
The airline has informed the government about the developments and will be submitting a detailed report to the aviation regulator Directorate General of Civil Aviation (DGCA).
Once the NCLT admits the application, then the flights will be restarted, Khona said. It may be noted that Go First has more than 5,000 employees.
The fresh development comes after it was reported that Go First was seeking to raise funds and Wadia Group was in talks to either sell a majority stake or completely exit its shareholding in the airline.
Go First is another Indian airline that is on the verge of failure due to a period of severe fund crunch. A few years ago, Jet Airways met a similar fate after facing financial difficulties.
