Cash-strapped Go First on Tuesday sought voluntary insolvency resolution proceedings and decided to cancel flights for three days starting from 3 May, as the budget airline is unable to meet financial obligations amid the grounding of half of its fleet due to the non-availability of Pratt & Whitney engines.
Go First, which has been flying for more than 17 years, will cancel all flights for three days — May 3, 4 and 5 — and promised to make a full refund to the customers. It operates around 180-185 flights, carrying around 30,000 passengers on a daily basis.
The airline’s CEO Kaushik Khona said the airline has grounded 28 planes, more than half of its fleet, due to the non-supply of engines by Pratt & Whitney (P&W), and that has resulted in a fund crunch.
“It is an unfortunate decision (filing for voluntary insolvency resolution proceedings), but it had to be done to protect the interests of the company,” he told news agencyThe Wadia group-owned carrier has moved the National Company Law Tribunal (NCLT), Delhi, seeking voluntary insolvency resolution proceedings.
Go First is the second major scheduled airline after Jet Airways to seek resolution under insolvency proceedings.
Amid travel disruptions due to the sudden cancellation of Go First flights, aviation regulator DGCA has issued a show cause notice to the embattled carrier.
The Directorate General of Civil Aviation (DGCA) said the airline has cancelled the scheduled flights for 3 and 4 May “without any prior intimation”.
While the carrier announced that it will cancel the flights for 3 and 4 May, it was extended by another day to 5 May, as per a notice on the carrier’s website.
According to Khona, the current liabilities of the airline would be around Rs 9,000 crore. The carrier has around 7,000 direct employees.
Civil Aviation Minister Jyotiraditya Scindia said it was unfortunate that the operational bottleneck related to engine supplies has dealt a blow to the airline’s financial position.
“It is prudent to wait for the judicial process to run its course,” he said in a statement.
