Wadia Group is “completely committed” to Go First Airline and will not exit the airline, the airline’s chief executive officer Kaushik Khona told news agency Reuters on Wednesday. He added that some people have expressed interest in the airline.
On Tuesday, Go First filed for bankruptcy with the National Company Law Tribunal, blaming Pratt & Whitney engines for grounding about half its fleet. Aviation regulator Directorate General of Civil Aviation (DGCA) issued a show cause notice to Go First after the airline decided to cancel flights for two days amid a severe financial crunch.
The crisis-hit airline has cancelled all their scheduled flights for May 3 and 4 “without any prior intimation”, the DGCA said in a statement.
The insolvency filing marks the first major airline collapse in the country since Jet Airways filed for bankruptcy in 2019 and underscores the fierce competition in the sector.
Go First’s filing comes after Pratt & Whitney, the exclusive engine supplier for the airline’s Airbus A320neo aircraft fleet, refused to comply with an order to release engines to the airline that would have allowed it to return to full operations, the company said.
“…in the absence of Pratt & Whitney not providing the required number of spare leased engines in accordance with the order issued by the emergency arbitrator, Go First is no longer in a position to continue to meet its financial obligations,” the airline said.
On Wednesday, Pratt & Whitney said that the airline has a “history of missing its financial obligations”.
“Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritise delivery schedules for all customers. Pratt & Whitney is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further,” the company said.
Khona told Reuters that the airline had made all their due payments to P&W. He added that the insolvency proceedings are not to sell the airline but to revive it. The call was taken to preserve the airline’s assets.
Business Standard reported in April that Go First would receive Rs 600 crore more as promoter equity and bank debt by the month’s end. This will help it meet immediate capital requirements. The Wadia family and banks would provide Rs 300 crore each.
Khona added that the airline will not sell tickets for at least till May end. The airline is in touch with all its lenders and the civil aviation ministry. Khona said that the Centre is keen that the airline should not fail.
Reports suggest that the airline owes Rs 6,521 crore to several lenders, including the Bank of Baroda, Axis Bank and IDBI Bank.
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