Go First crisis: Govt bailout not possible unless engine issue is resolved, says minister

Go First crisis: Union Minister of State VK Singh has said that a government bailout of cash-strapped Go Airlines was unlikely until the issue of the supply of engines with US-based Pratt & Whitney is sorted out.

Last week, Go First airline moved the National Company Law Tribunal (NCLT) where it filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016. The airline has blamed engine-maker Pratt & Whitney for its fresh troubles and said that their faulty engines had resulted in the grounding of 50 per cent of its fleet consisting of 54 Airbus A320neos.

Reacting to the ongoing crisis within Go First, Singh said, “The problem with Go Air is that their flights are run on engines of Pratt & Whitney, which is facing management issues after Covid-19... So (engine) manufacturing is not happening at the pace that it should have."

When asked about a government bailout, Singh said: "Where will Pratt & Whitney get (engines)? Bailout can only happen when something can be done about this."

On Monday, Wadia Group controlled Go First asked the National Company Law Tribunal (NCLT) to urgently pass an order on its insolvency plea, citing lessors' efforts to take back planes.

Go First lawyers told the tribunal that it should pass an order on the airline's insolvency plea as lessors had moved to court to repossess the planes.

Pratt & Whitney, meanwhile, has claimed Go First's allegation of the engines causing its demise was “astounding” and without evidence.

In addition to this, aviation regulator Directorate General of Civil Aviation (DGCA) on Monday issued a second notice to Go First, which has suspended flights from May 3. 
“Go First has been directed to stop booking and sale of tickets directly or indirectly, with immediate effect and until further orders,” DGCA said in a statement on Monday.

DGCA had issued the first notice on May 2.

The regulator said it would decide if Go First should be allowed to operate flights on the basis of its reply to the notice. The airline has been given 15 days to respond to the notice.

(With agency inputs)

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