Indian low-cost carrier Go First has filed for voluntary insolvency resolution proceedings on Tuesday before the National Company Law Tribunal (NCLT), Delhi. The airline will temporarily halt operations on May 3 and May 4, due to a serious cash shortage, CEO Kaushik Khona of the company informed news agency PTI.
“Go First is facing financial crunch due to non-supply of engines by P&W, that has forced the grounding of 28 planes," he said.
The company, according to Khona, has also requested National Company Law Tribunal (NCLT's) voluntary insolvency resolution procedures.
Speaking to PTI, Khona claimed that the airline had grounded 28 aircraft—more than half of its fleet—due to Pratt & Whitney's (P&W) failure to supply engines. Consequently, there is a financial crisis.
He stated that although the choice to initiate voluntary insolvency resolution procedures was unfortunate, it was necessary to do so in order to safeguard the company's interests.
The airline has informed the government of the events and will also provide a thorough report to the Directorate General of Civil Aviation (DGCA), which oversees aviation safety.
There will be no flights on May 3 and 4. Flights will resume after the NCLT approves the application, according to Khona.
More than 5,000 people are employed at Go First.
The airline owned by the Wadia group is in talks with possible investors and looking for a strategic investor in the business.
In addition, the airline has filed a complaint in federal court in Delaware against the US-based engine manufacturer, asking for enforcement of an arbitration ruling requiring Pratt & Whitney to supply it with engines, failing which there is a risk of the airline going out of business.
According to the arbitration ruling in Go First's favour issued on March 30, there is a possibility of permanent harm if emergency engines are not provided.
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