Is Go First going Kingfisher way? Cash-strapped airline halts flight bookings for next 3 days

Go First has halted ticket booking for the next two days - May 3 to May 5 and the airline has grounded 60 per cent of its flights, citing a fund crunch. As per a report by PTI, the airline's chief Kaushik Khona confirmed the development, saying the cash crunch due to the non-supply of planes has led to the cancellation of flights. 

However, DGCA hits back at Go First and issued a show cause notice to the airline for cancelling flights without prior intimation to the regulatory body. It has also directed GO First to submit its plan of action to operate flights as per the approved schedule from May 5, 2023, onwards.   

Also Read - Go First ticket cancellation: How to get refund for cancelled flights and tickets - check process

It is reported that the budget carrier has also filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT), Delhi.

Speaking to PTI, Khona said the airline has grounded 28 planes, more than half of its fleet, due to the non-supply of engines by Pratt & Whitney (P&W). This has resulted in a fund crunch.

"It is an unfortunate decision (filing for voluntary insolvency resolution proceedings) but it had to be done to protect the interests of the company," he said. The airline has informed the government about the developments and will also be submitting a detailed report to the aviation regulator Directorate General of Civil Aviation (DGCA).

The airline said it will issue refunds via the original mode of payment shortly. 

DGCA slaps notice

DGCA in its showcause notice to Go First said, "Whereas no prior intimation has been given to DGCA for such cancellations, which is non-compliance with conditions for approval of schedule. Thus M/S Go First has failed to report in writing the cancellation."

The notice further reads, "Therefore M/S Go First is hereby called upon to Show Cause as to why suitable action shall not be initiated against the airline for the aforesaid violation. The reply of M/S Go First shall reach this office within 24 hours from the date and time of issue of this notice, failing which, the matter would be processed ex-parte."  

The DGCA has asked the airline to submit the details of the steps taken to mitigate passengers' inconvenience, and also submit a plan of action from May 5 onwards.  

"Further, M/S Go First is also directed to submit the details of the steps taken to mitigate the inconvenience caused to the passengers booked on flights for 3rd and 4th May 2023, and submit their plan of action to operate flights as per the approved schedule from 05th May, 2023, onwards," the notice says. 

Ministry promises help

Civil Aviation minister Jyotiraditya Scindia, meanwhile, said that the ministry is in talks with the stakeholders and would assist the airline in every possible manner.  
 
"Go First has been faced with critical supply chain issues with regard to their engines. The GOI has been assisting the airline in every possible manner. The issue has also been taken up with the stakeholders involved," said the minister in the statement.

The minister later said that since the matter is in the NCLT court, it would wait for the judicial outcome.    

"Yet, it is unfortunate that this operational bottleneck has dealt a blow to the airline’s financial position. It has come to our knowledge that the airline has applied to the NCLT. It is prudent to wait for the judicial process to run its course. 

o First has been in the industry for over 17 years and served 84 million passengers. "GO FIRST anticipates and expects that once the application under section 10 of IBC is admitted, the appointed Interim Resolution Professional will sustain GO FIRST’s operations, allowing it to serve many more passengers in the years to come," a Go First release said.

Go First has paid Rs 5,657 crores to lessors in the last two years of which approximately Rs 1600 crores was paid towards lease rent for non-operational grounded aircraft from the funds infused by the Promoters & Government of India’s Emergency Credit Line Guarantee Scheme.

Later, the company in a statement described why it decided to ground its aircraft. "GO FIRST has had to take this step due to the ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines, LLC, which has resulted in GO FIRST having to ground 25 aircraft (equivalent to approximately 50% of its Airbus A320neo aircraft fleet) as of 1 May 2023. The percentage of grounded aircraft due to Pratt & Whitney’s faulty engines has grown from 7% in December 2019 to 31% in December 2020 to 50% in December 2022."

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