New Delhi/Mumbai: go airlinesfounded by billionaire Nusli Wadia, filed for bankruptcy on Tuesday, the low-cost carrier blamed US engine maker Pratt & Whitney for grounding half its fleet. Naming go first Last May, the airline that took off in 2005 became the first Wadia Group entity to declare bankruptcy in its 287-year history and the third major airline since 2012 after Kingfisher and Jet.
The bankruptcy application, once accepted by the National Company Law Tribunal Delhi, will see Wadia, his son Ness Wadia, the airline’s chairman Varun Berry and other board members as well as the management come under the control of a resolution professional appointed by the platform.
The airline canceled all its flights from Wednesday to Friday (May 3 to 5), amid huge demand for travel in India as domestic traffic hit new highs since the beginning of this year. With an average of 30,000 daily domestic travelers this March, the move could affect around 90,000 people who booked to fly GoFirst.
Also in the form of DGCA Has issued a show cause notice to GoFirst for suspension of operations for 3 days, it has also sought its action plan to “operate flights as per the approved schedule from May (6), 2023.” Civil Aviation Minister Jyotiraditya Scindia said, “It is up to the airline to make alternate travel arrangements for passengers so that inconvenience is minimised”.
On its website, Go First stated: “…for operational reasons, go first flights The event scheduled for 3rd, 4th & 5th May, 2023 has been cancelled…. Full refund will be issued shortly to the original mode of payment… We are committed to provide all possible assistance. “
The airline, which has 61 aircraft in its fleet, said it moved the NCLT under the Insolvency and Bankruptcy Code (IBC) “due to the ever-increasing number of failed engines supplied by P&W, resulting in Go First 25 aircraft had to be grounded (about 50% of its Airbus A320neo aircraft fleet by May 1, 2023).
P&W did not respond to a request for comment.
Go First, which is on cash and carry by oil and airport companies, claims the grounding has cost it Rs 10,800 crore in terms of lost revenue and expenses, including lease payments of Rs 1,600 crore paid for grounded planes. Rentals are also included. GoFirst has sought Rs 8,000 crore as compensation from PW. If he gets that money, he “expects to be able to address the liabilities of creditors … although at this stage …. is no longer in a position to meet financial obligations”.
Minister Scindia said: “GoFirst has faced significant supply chain issues with respect to its engines. The government is assisting the airline in every possible way… Raised the issue with (P&W) has been … unfortunately this operational disruption has dealt a blow to the financial position of the airline …. it is prudent to wait for the judicial process to run its course.”
Whether GoFirst takes off and how many flights it operates remains to be seen. The DGCA had approved a weekly schedule for 22,907 domestic flights this summer, of which GoFirst was to operate 1,538 flights. Also, airlines staring at an uncertain future will be closely monitored on whether they will be able to receive fresh bookings either directly from passengers or from travel agents and portals. In the past, neither passengers nor travel agents have received refunds from both large and small airlines that have shut down.
The bankruptcy application, once accepted by the National Company Law Tribunal Delhi, will see Wadia, his son Ness Wadia, the airline’s chairman Varun Berry and other board members as well as the management come under the control of a resolution professional appointed by the platform.
The airline canceled all its flights from Wednesday to Friday (May 3 to 5), amid huge demand for travel in India as domestic traffic hit new highs since the beginning of this year. With an average of 30,000 daily domestic travelers this March, the move could affect around 90,000 people who booked to fly GoFirst.
Also in the form of DGCA Has issued a show cause notice to GoFirst for suspension of operations for 3 days, it has also sought its action plan to “operate flights as per the approved schedule from May (6), 2023.” Civil Aviation Minister Jyotiraditya Scindia said, “It is up to the airline to make alternate travel arrangements for passengers so that inconvenience is minimised”.
On its website, Go First stated: “…for operational reasons, go first flights The event scheduled for 3rd, 4th & 5th May, 2023 has been cancelled…. Full refund will be issued shortly to the original mode of payment… We are committed to provide all possible assistance. “
The airline, which has 61 aircraft in its fleet, said it moved the NCLT under the Insolvency and Bankruptcy Code (IBC) “due to the ever-increasing number of failed engines supplied by P&W, resulting in Go First 25 aircraft had to be grounded (about 50% of its Airbus A320neo aircraft fleet by May 1, 2023).
P&W did not respond to a request for comment.
Go First, which is on cash and carry by oil and airport companies, claims the grounding has cost it Rs 10,800 crore in terms of lost revenue and expenses, including lease payments of Rs 1,600 crore paid for grounded planes. Rentals are also included. GoFirst has sought Rs 8,000 crore as compensation from PW. If he gets that money, he “expects to be able to address the liabilities of creditors … although at this stage …. is no longer in a position to meet financial obligations”.
Minister Scindia said: “GoFirst has faced significant supply chain issues with respect to its engines. The government is assisting the airline in every possible way… Raised the issue with (P&W) has been … unfortunately this operational disruption has dealt a blow to the financial position of the airline …. it is prudent to wait for the judicial process to run its course.”
Whether GoFirst takes off and how many flights it operates remains to be seen. The DGCA had approved a weekly schedule for 22,907 domestic flights this summer, of which GoFirst was to operate 1,538 flights. Also, airlines staring at an uncertain future will be closely monitored on whether they will be able to receive fresh bookings either directly from passengers or from travel agents and portals. In the past, neither passengers nor travel agents have received refunds from both large and small airlines that have shut down.