Indian Carrier GoFirst Files for Bankruptcy Blaming Engine Delivery Delays

25.08.2023 - 13:41 / skift.com / Ted Christie / Peden Doma Bhutia

Indian low-cost carrier GoFirst filed for bankruptcy with the National Company Law Tribunal on Tuesday, citing mounting losses due to the grounding of almost half of its aircraft.

The airline, previously known as Go Air, attributed the grounding of its aircraft to engine delivery delays by Pratt & Whitney and said the delay has resulted in losses amounting to $1.32 billion.

The bankruptcy filing was announced shortly after the airline said it will temporarily suspend flight operations on May 3-5 due to a “severe fund crunch.” GoFirst CEO Kaushik Khona said the flights would restart once the tribunal admits the application.

Due to operational reasons, GoFirst flights for 3rd, 4th and 5th May 2023 have been cancelled. We sincerely apologise to our loyal customers. Please visit https://t.co/qRNQ4oQROr for more information. We assure that we’ll be back with more information soon. #GoFirst pic.twitter.com/QAJlL017QS

Since 2019, GoFirst is the second Indian airline to file for bankruptcy after Jet Airways.

GoFirst was the fifth largest airline in India by scheduled departures this month, according to aviation analytics firm Cirium.

GoFirst had plans to operate to 34 destinations in Asia in May, with its primary operations taking place at Delhi and Mumbai Airport. The airline’s schedule for this month included 6,225 flights, which would have provided more than 1.1 million seats.

Cirium pointed out that the airline had an all A320 fleet, with an average fleet age of only 5.6 years.

The percentage of grounded aircraft due to Pratt & Whitney’s faulty engines has grown from 7 percent in December 2019 to 31 percent in December 2020 and now 50 percent in December 2022, GoFirst said in a statement.

“This is despite Pratt & Whitney making several ongoing assurances over the years, which it has repeatedly failed to meet,” the statement read.

In March, GoFirst’s market share slid from 8 percent to 6.9 percent and its passenger load factor also fell from 93.1 percent to 90.2 percent. The airline’s market share had peaked in May last year when it stood at 11.1 percent.

“Pratt & Whitney continues to struggle to support its worldwide fleet of neo aircraft as maintenance, repair and operations capacity remains constrained and turnaround times for engines in the shop have been nearly three times longer than the historical averages,” Spirit Airlines CEO Ted Christie had said in February. 

GoFirst said Pratt & Whitney has refused to comply with an award issued by the Singapore International Arbitration Centre. It claims the arbitration could yield a payment of around $1 billion, which could help pay off the company’s debts to creditors.

“If Pratt & Whitney were to comply with the orders in the emergency arbitrator’s award,