GoFirst's Bankruptcy Filing Sends Shockwaves Through Indian Aviation Industry

GoFirst Files for Bankruptcy: Unavailability of Aircraft due to Faulty Engines

GoFirst, an Indian airline, has filed for bankruptcy with the National Company Law Tribunal (NCLT) due to the unavailability of aircraft caused by Pratt & Whitney’s faulty engines. This situation has raised concerns about the future of the Indian aviation industry, especially given the prolonged efforts to revive Jet Airways, which have not borne any results yet.

Unavailability of Aircraft Affects GoFirst’s Operations

GoFirst has been facing headwinds with the unavailability of aircraft for several quarters. All its A320neo aircraft are powered by Pratt & Whitney, and the engine manufacturer has had issues supplying replacement engines to GoFirst as well as IndiGo. The airline said that 25 aircraft are grounded awaiting engines, which comprises about 50 percent of its fleet. The percentage of grounded aircraft due to Pratt & Whitney’s faulty engines has grown from 7 percent in December 2019 to 31 percent in December 2020 to 50 percent in December 2022.

Uncertainty Looms Over GoFirst’s Future

Once the application is admitted under NCLT, an interim resolution professional will take over and operate GoFirst. The airline's website talks about cancellation for three days, and flights are open for sale beyond May 6. However, this situation raises questions about how customers, suppliers, and airports will handle the chaos caused by the airline’s bankruptcy. It is unclear how customers will trust the airline or if suppliers will provide any credit. The website of the airline does mention refunds to customers who were booked in the next three days. Still, the path forward is uncertain. The situation highlights the challenges faced by the Indian aviation industry, particularly given the impact of Covid-19 on airlines' operations.

Impact on Indian Aviation Industry

GoFirst's bankruptcy filing due to the unavailability of aircraft caused by faulty engines has raised concerns about the Indian aviation industry's future. The prolonged efforts to revive Jet Airways under the Insolvency and Bankruptcy Code (IBC) have not borne any results yet, highlighting the industry's challenges. The unavailability of aircraft due to faulty engines also affects other airlines in India, such as IndiGo, which have faced similar issues with Pratt & Whitney engines.

Way Forward for GoFirst

GoFirst's best-case scenario expects the airline to resume operations by August or September this year if the situation with Pratt & Whitney resolves by then. The airline's promoters have also induced close to Rs 300 crore in April this year. However, the path forward is uncertain, and it remains to be seen how the situation will unfold. The airline's bankruptcy filing will have significant implications for its employees, lessors, and other stakeholders, and the industry will be watching closely.

Lessons Learned from GoFirst's Bankruptcy

GoFirst's bankruptcy filing due to the unavailability of aircraft caused by faulty engines highlights the importance of supply chain resilience and contingency planning for airlines. The aviation industry is highly dependent on complex and interlinked supply chains, and disruptions can have significant consequences. Therefore, it is essential for airlines to have robust contingency plans and diversify their suppliers to mitigate risks. Additionally, the Indian aviation industry needs to address the structural issues that have hampered its growth and competitiveness, such as high taxes, infrastructure bottlenecks, and regulatory challenges.

Lessons Learned from GoFirst's Bankruptcy

GoFirst's bankruptcy filing due to the unavailability of aircraft caused by faulty engines is a significant setback for the Indian aviation industry, which was looking forward to a recovery after the impact of Covid-19. The situation highlights the challenges faced by the industry and the need for resilience and contingency planning. The industry will be watching closely to see how the situation with GoFirst unfolds and what lessons can be learned to prevent similar situations in the future.

Important News Tags and Headlines for Readers

Unavailability of Aircraft: GoFirst's Bankruptcy Filing Highlights Challenges for Indian Airlines

Pratt & Whitney Engine Issues: GoFirst's Bankruptcy Filing Raises Alarms for Indian Aviation

GoFirst's Bankruptcy Filing Highlights Need for Supply Chain Resilience in Indian Aviation Industry

What Can We Learn from GoFirst's Bankruptcy Filing and Its Impact on Indian Aviation?