Go First insolvency: Airfares might go up due to Go First cancellations, says TAAI

Go First insolvency: Travel agents' grouping Travel Agents Association of India (TAAI) on Wednesday said that the crisis around Go First after it filed for insolvency proceedings on Tuesday, along with the subsequent cancelled flights, is bad for the airline industry. It said the move will reduce capacity and could push airfares in certain routes in the near future. 

On Tuesday, Go Airlines (India) Limited or Go First said it has been “forced” to apply to the National Company Law Tribunal (NCLT) Delhi for resolution and protection under Section 10 of IBC due to the ever-increasing failure of Pratt and Whitney engines that power its fleet. 

Besides, the carrier said it will temporarily suspend flight operations on May 3 and 4 due to a "severe fund crunch". Go First CEO Kaushik Khona said that the flights will be restarted once the NCLT admits the application. 

The airline has also lodged a lawsuit against the US-based engine maker in a Delaware federal court, seeking enforcement of an arbitration award that directed PW to provide the airline with engines, failing which there is a risk of the carrier shutting down. 

Talking about the stress in the aviation sector, Travel Agents Association of India president Jyoti Mayal said: "It is bad for the (airlines) industry... It is such a fragile industry... we lost crores of rupees in Kingfisher Airlines, in Jet Airways and we have another one going into insolvency (proceedings)." 

Mayal added that right now there is demand for air travel as it is holiday time and "we do expect fares going up in sectors it (Go First) was flying. In the coming weeks, fares are likely to go up."  

Regarding booked tickets, she said it is the company that has to provide refunds and if it goes into insolvency, the rules are different. "Those are the challenges we are going to be facing,” she said. 

Cancelled tickets 

Go First Airways, after cancelling tickets for May 3, 4, 5, has offered a full refund to those who had booked tickets. The airline, which connects 27 domestic destinations and seven international cities, on Tuesday said it is unable to meet financial obligations amid the grounding of half of its fleet due to the non-availability of Pratt & Whitney engines.  The airline operates around 180-185 flights, carrying around 30,000 passengers on a daily basis. 

In a statement, the company said: “We regret to inform you that due to operational reasons, Go First flights scheduled for 3rd, 4th and 5th May 2023 have been cancelled. We apologize for the inconvenience caused by the flight cancellations. A full refund will be issued to the original mode of payment shortly.” 

It added: “We acknowledge the flight cancellations might have disrupted your travel plans and we are committed to providing all the assistance we can. We thank you for your patience. Kindly contact our Customer Care Centre on 1800 2100 999 or write to us at feedback@flygofirst.com to let us know how we can help you.”  

(With agency inputs)

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