P&W engines serial failure led to NCLT option, says GoFirst

MUMBAI: Go First on Tuesday said it has been forced to seek voluntary insolvency resolution proceedings due to “serial failure” of Pratt & Whitney engines resulting in grounding of 50 per cent of the fleet and is no longer in a position to continue to meet its financial obligations.

The latest move by the Wadia group-owned carrier, which has been flying for more than 17 years, came after arbitration proceedings in Singapore and a suit filed in a US court seeking enforcement of the arbitration award last month.

In a detailed statement shared with PTI, Go First said it has been forced to apply to the National Company Law Tribunal (NCLT) because of the recurring and persistent issues with the GTF (Geared Turbofan) engines supplied by P&W.

Also, Pratt & Whitney has failed to repair those engines and/or provide sufficient spare leased engines as it was required to do pursuant to its obligations under the relevant agreements between them. Promoters have infused funds worth Rs 3,200 crore into the airline in the last three years and out of the total amount, Rs 2,400 crore was injected in the last 24 months. An amount of Rs 290 crore was pumped in April this year.

“This brings the total investment in the airline since its inception to approximately Rs 6,500 crore,” the statement said. Further, Go First said it has received significant support from the government’s Emergency Credit Line Guarantee Scheme (ECLGS).

“Even this collective and significant support has not been adequate to prevent the enormous damage caused by Pratt & Whitney’s defective engines.

“The grounding of close to 50 per cent of its fleet due to the serial failure of Pratt & Whitney’s engines, while incurring 100% of its operational costs has set Go First back by Rs 10,800 crore in lost revenues and additional expenses,” it said.

Meanwhile, civil aviation minister Jyotiraditya Scindia on Tuesday said it was unfortunate that the operational bottleneck related to engine supplies has dealt a blow to the airline’s financial position. Against the backdrop of the airline filing an application for voluntary insolvency resolution proceedings, the minister said, “It is prudent to wait for the judicial process to run its course”. Faced with a severe financial crunch, the budget carrier has also decided to cancel flights for May 3 and 4. “Go First has been faced with critical supply chain issues with regard to their engines. The Government of India has been assisting the airline in every possible manner. The issue has also been taken up with the stakeholders involved,” Scindia said in a statement.