“GO AIRLINE HAS HISTORY OF MISSING FINANCIAL OBLIGATIONS”
Chennai: With the Wadia group’s low cost Go Airline (India) Limited squarely blaming engine supplier, the US-based Pratt & Whitney for its financial woes and taxiing it to file bankruptcy petition, the latter has responded. “Go First has a lengthy history of missing its financial obligations to Pratt,” a spokesperson for the aircraft engine supplier Pratt & Whitney responded to IANS list of questions. However, the official declined to elaborate further on its allegation against Go Airline.
“Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. P&W (Pratt & Whitney) 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,” the company spokesperson said.
Curiously, Go Airlines had said that it has been forced to apply to the National Company Law Tribunal (NCLT) for voluntary bankruptcy after Pratt & Whitney, the exclusive engine supplier for its Airbus A320neo aircraft fleet, refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC).
“That order directed Pratt & Whitney to take all the reasonable steps to release and dispatch without delay to Go First at least 10 serviceable spare leased engines by April 27, 2023 and a further 10 spare leased engines per month until December 2023, with the objective of Go First returning to full operations and achieving its financial rehabilitation and survival,” the airline said in early May.
Continuing further, Go Airlines had said that even if Pratt & Whitney complied with the arbitration award, it would be able to resume full operations by August/September 2023. “Despite the emergency arbitrator’s order, however, at the date of this press release, Pratt & Whitney has failed to provide any further serviceable spare leased engines at all, and has stated that there are no further spare leased engines available for it to comply with the emergency arbitrator’s award,” Go Airlines had said. The airline has filed a case in a US court against Pratt & Whitney to comply with the Arbitration Award.
The airline said it has resorted to approaching NCLT despite the infusion of Rs 3,200 crore by the promoters into the airline in the last three years, of which Rs 2,400 crore was injected in the last 24 months, and Rs 290 crore in April 2023 alone. Thus, the total promoter investment in the airline since its inception is approximately Rs 6,500 crore. The airline has also received significant support from the Government of India’s Emergency Credit Line Guarantee Scheme, the company said.
The grounding of close to 50 per cent of its A320neo fleet due to the serial failure of Pratt & Whitney engines, while it continued to incur 100 per cent of its operational costs, has set the airline by Rs 10,800 crore in lost revenues and additional expenses.
Moreover, the airline has paid Rs 5,657 crore to the lessors in the last two years of which approximately Rs 1,600 crore was paid towards lease rent for non-operational grounded aircraft from the funds infused by the promoters and the Government of India’s Emergency Credit Line Guarantee Scheme.
In order to recover these (and other) losses, Go Airlines sought compensation of approximately Rs 8,000 crore in the SIAC arbitration. The airline is yet to respond to IANS queries on its response to Pratt & Whitney’s charge of missing its financial obligations, its total debt to Indian banks and other lenders and dues to its employees.