Go First files for insolvency; suspends flights for May 3-5
What's the story
Amid a severe cash crunch, Go First Airlines has filed for voluntary insolvency resolution proceedings in the National Company Law Tribunal (NCLT), CEO Kaushik Khona told PTI. It has also suspended all flights for Wednesday, Thursday, and Friday, reportedly over issuing concerning uncleared dues to oil marketing companies. The Wadia Group-owned airline has informed the Directorate General of Civil Aviation (DGCA) of the same.
Latest development
Over half of airline's fleet grounded, says CEO
As per Khona, the troubled airline grounded about 28 aircraft, which is over half its fleet, due to issues with Pratt & Whitney, an American aircraft engine manufacturer. This has seriously affected its cash flow, leading to a critical fund crunch. Reportedly, Go First has also filed an emergency petition in a United States court against Pratt & Whitney over the non-supply of engines.
Details
Unfortunate decision, but had to be done: Khona
"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 told PTI. He added the Centre was informed about the latest developments, and they will provide the aviation watchdog with a detailed report. The flight operations will be resumed once the NCLT accepts the insolvency application, he further said.
More information
Go First looking for potential investors
Go First's application for voluntary insolvency resolution proceedings follows reports in recent days that the airline had been looking to raise funds. It was reportedly eyeing a strategic investor, had been in talks with several potential investors to dispose of a majority stake, and was even ready to exit shareholding in the airline altogether, reported India Today.
Information
Airline posted biggest loss to date in FY22
Moreover, amid operational issues and financial crunch, Go First reported its highest-ever annual loss of over Rs. 1,800 crore in FY 2022-23. As per the DGCA, Go First's market share was reportedly 6.9% in March 2023, down from 8.4% in January and 9.8% in 2022.