Cash-strapped budget airline Go First has sought an interim moratorium as the Delhi chapter of the National Company Law Tribunal (NCLT) began hearing its voluntary insolvency plea on Thursday. However, NCLT informed the Wadia group-owned airline that there is no scope for an interim moratorium.
The airline’s plea for initiation of insolvency proceedings was mentioned before NCLT’s Delhi bench-headed by President Justice Ramalingam Sudhakar on Wednesday and the bench agreed to an urgent hearing on Thursday.
What Go First said?
The budget carrier, on Tuesday, cited the grounding of more than half of the fleet due to non-supply of engines by Pratt & Whitney as the reason for its financial crunch
The airline said in its filing “due to the ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines,” resulting in the grounding of 25 A320neo jets.
Go, owned by Indian conglomerate Wadia Group, also said that Pratt refused to comply with an award issued by an emergency arbitrator to provide the carrier with at least 10 usable engines by April 27, and an additional 10 a month until December 2023.
The airline also said it is “no longer in a position to continue to meet its financial obligations.” The carrier filed a motion in a Delaware court to enforce the arbitration awards.
What Pratt & Whitney said?
Responding to the allegations, Pratt & Whitney on Wednesday said it is complying with the arbitration order regarding the airline and continues to prioritise delivery schedules for all customers.
Pratt & Whitney’s statement reads, the company is committed to the success of our airline customers, and we continue to prioritize 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.
“Go First has a lengthy history of missing its financial obligations to Pratt,” said Pratt and Whitney officials
Go First suspends flight
Go First Airlines announced that its flight operations will remain cancelled from May 3 to May 5 adding that a full refund will be issued to the passengers. However, some reports suggest that flight operations may remain suspended till May 15.
Go First is the second major scheduled airline after Jet Airways to seek resolution under insolvency proceedings.
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