Pratt & Whitney accuses Go First of 'lengthy' non-payment history
United States (US)-based aircraft engine manufacturer Pratt & Whitney (P&W) has alleged that Go First has a "lengthy" history of non-payment after the Indian air carrier filed for voluntary insolvency. While Go First has blamed P&W for its recent downfall, the engine manufacturer said that the airline didn't pay its dues on time and had defaulted numerous times.
Why does this story matter?
The response from P&W came after Go First filed for voluntary insolvency before the National Company Law Tribunal (NCLT) and blamed it for supplying faulty engines, which forced the Wadia Group-owned airline to ground half of its A320neo aircraft. Earlier on Tuesday, Go First also informed the Directorate General of Civil Aviation (DGCA) that all its flights will remain canceled from Wednesday to Thursday.
This is a matter of litigation: P&W spokesperson
Speaking about the allegations made by Go First, an official spokesperson for P&W said that the company is fully committed to delivering success to its airline customers. The official also added that this issue is a matter of litigation and P&W will not be making any further comments on it, reported the news agency PTI.
P&W continues to prioritize delivery schedules for all customers: Official
"Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. P&W is complying with the March 2023 arbitration ruling related to Go First," said the P&W spokesperson. "As this is now a matter of litigation, we will not comment further," the spokesperson added.
Go First filed for insolvency; suspended flights for May 3-5
On Tuesday, Go First CEO Kaushik Khona claimed that the airline grounded about 28 aircraft, which is more than 50% of its fleet, amid issues with the American aircraft engine manufacturer. This has seriously affected Go First's cash flow, leading to a critical fund crunch. The airline has reportedly filed an emergency petition in a US court against P&W over the non-supply of engines.
Know about voluntary insolvency
Voluntary insolvency means a company has accepted that its business is insolvent. It can be defined as a process in which a company claims that it cannot pay its debts and requires assistance from someone else. It is also worth noting that it is a time-bound process and must be finished within 270 days from the official commencement of voluntary liquidation.
Go First posted biggest-ever loss to date in FY22
Amid a financial crunch and numerous operational issues, Go First recorded its highest-ever annual loss of more than Rs. 1,800 crore in FY 2022-23. According to the country's civil aviation regulator, the Wadia Group-owned airline's market share in March 2023 was reportedly around 6.9%, a decrease from 8.4% in January and 9.8% last year.
