Go First CEO Kaushik Khona said that the airline has filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT). This comes after Go First on Tuesday said that it has cancelled its flights for May 3 and 4 amid a cash crunch. The airline has been facing issues related to pending dues to oil marketing companies.
CEO Khona told news agency PTI that the airline has been facing a financial crunch due to non-supply of engines by Pratt & Whitney that forced the grounding of 28 of its planes. The airline is now looking for an investor to resume domestic operations. Tickets of the cancelled flights will be refunded in due process, the airline told Business Today TV.
Go First has grounded a large portion of its fleet due to recurrent issues and non-supply of engines from Pratt & Whitney. The company’s engines power the airline’s Airbus A320 neo aircraft.
''It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be done to protect the interests of the company,'' said CEO Khona to PTI.
The airline has informed the government about the developments and will also be submitting a detailed report to aviation regulator Directorate General of Civil Aviation (DGCA), as per PTI.
With the depleting fleet, the airline’s market share took a tumble too from 8.4 per cent in January to 6.9 per cent in March, as per the data by DGCA. Go First also posted its biggest annual loss in fiscal 2022, as well as has been facing operational problems in the last few months.
Go First is also seeking to raise funds. Indian conglomerate Wadia Group, which runs companies including textiles maker Bombay Dyeing & Manufacturing Co Ltd, is reportedly in talks to either sell a majority stake or to exit the shareholding entirely.
Meanwhile, the airline has sued Pratt & Whitney in a US federal court to make the company supply the engines to Go First.
(With agency inputs)
Also read: Go First in trouble! Severe cash crunch forces airline to cancel flights on May 3, 4
Watch: Go Air flights cancelled! Here's all you need to know after airline files for bankruptcy