Despite the National Company Law Tribunal stepping in to facilitate a revival, embattled airline Jet Airways is yet to take off again, years after being bogged down by debt. Even as the process for one aviation major's revival is being dragged on, Go First has joined the list of Indian airlines which have gone broke.
After Go First told NCLT that fuel suppliers, vendors and lessors have refused to provide services, the tribunal has reserved its order in the matter.
Defective engines damaged cash flow
During the hearing, NCLT blamed Pratt & Whitney for supplying defective engines without following it up with maintenance.
It also mentioned how a prolonged liquidity crisis made it impossible for Go First to operate as a corporate entity.
The airline sought an interim moratorium as relief in case NCLT didn't admit the plea, and sought the appointment of an Insolvency Resolution Professional to turn things around.
Paid dues but hit by increasing costs
A day after Pratt & Whitney alleged that Go First has a history of missing financial obligations, the airline mentioned during the hearing that it has paid Rs 19,980 crore to creditors since 2020.
It then admitted that it currently owes Rs 11,463 crore to banks, vendors and lessors, and also added that it has suffered a Rs 10,800 crore loss due to engine failures.
Hitting out at Pratt & Whitney further, Go First also told NCLT that first-time removals of 80 per cent engines had to be done before flying for 5,000 hours.
Their expenses also doubled between FY15 and FY23, owing to fixed costs including maintenance expenses and the lease, for aircraft that were grounded.