After Go First filed for bankruptcy blaming jet engine maker Pratt & Whitney (P&W) for grounding half of its fleet, the US aerospace major hit back stating that the budget airline has a "lengthy history of missing its financial obligations." A source at P&W told ANI that the budget airline has a lengthy history of missing its financial obligations to Pratt & Whitney.
Pratt & Whitney claims it is complying with arbitration
In a statement the US engine maker said it was "committed to the success of our airline customers, and we continue to prioritise delivery schedules for all customers. P&W 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."
On Tuesday, Go First Airlines said that due to the non-supply of engines by Pratt & Whitney operations will remain cancelled.
The airline’s biggest challenge is now to refund money to people who have booked tickets.
With airline filing for insolvency proceedings and cancelling flights is bad for the airline industry as the move will reduce capacity and could push airfares in certain routes.
Turbulence within family and a long awaited IPO
"It is bad for the (airlines) industry... It is such a fragile industry... we lost crores of rupees in Kingfisher Airlines, in Jet Airways and we have another one going into insolvency (proceedings)," Travel Agents Association of India (TAAI) President Jyoti Mayal told PTI.
According to a clued-in analyst “There was a difference of opinion between the father Nusli Wadia and son Jeh the way Go Air was run. The issue also revolved around intangible properties of the airline. It was finally amicably resolved with Jeh agreeing for the use of the trademark word ‘Go’.”
Post that the airline rechristened Go First, controlled by Nusli Wadia, was run by CEO Kaushik Khona. Go First was preparing to tap the capital market to raise around Rs 3600 crore plus.
Union Civil Aviation Minister Jyotiraditya Scindia said that the Government of India has been assisting Go First Airlines in every possible manner but it is incumbent upon the airline to make alternative travel arrangements for passengers so that they do not face inconvenience.
NCLT has scheduled a hearing for the crisis hit Go First's insolvency plea on May 4.
