On May 4, the aviation regulator Directorate General of Civil Aviation (DGCA) asked the cash-strapped airline Go First to refund passengers who had booked tickets. Furthermore, the airline has suspended the sale of flight tickets till May 15 and is working on processing refunds to passengers or rescheduling the bookings for future dates.
In a statement, the DGCA said, “Go First has intimated that they have suspended sale of their flights till May 15 2023 and are working to refund or reschedule for future dates, the passengers already booked to fly with them. DGCA has examined the response of Go First and has issued an order under the prevailing regulations directing them to process the refunds to passengers as per the timelines specifically stipulated in the relevant regulation.”
On May 2, the DGCA issued a show cause notice to Go First for not informing them about the airline’s suspension of flights from May 3 to 5.
In response to the DGCA’s show cause notice, the airline intimidated the aviation regulator that the Go First has filed an application u/s 10 of the Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT).
“They have further intimated that they have temporarily suspended scheduled flight operations for 3 days effective May 3 2023 and shall take further course of action as per the outcome of their application before NCLT,” the DGCA stated. The DGCA issued the order under prevailing regulations to process refunds for the passengers.
Furthermore, the airline tweeted, “We regret to inform that due to operational reasons, Go First flights scheduled till May 9 2023 have been cancelled. We apologise for the inconvenience caused by the flight cancellations. A full refund will be issued to the original mode of payment shortly,” on May 4.
However, these are not the only flight cancellations. The airline has submitted to the NCLT, where they have filed for insolvency, that they have cancelled 4118 flights and they would cancel more flights to manage their cost and fleet constraints in the future.
The airline said they were forced to take this step because of the “ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines.” The airline has submitted that Pratt & Whitney broke their commitment to replace faulty engines within 48 hours and repair them for free. Go First added that Pratt & Whitney refused to acknowledge any claim for compensation despite receiving Rs 400 crore till March 2020 after “recognising its failure.”
A Go First official said, “Go First is facing financial crunch due to non-supply of engines by US-based jet engines manufacturer Pratt and Whitney (P&W) that has forced grounding more than 50 planes”, resulting in a fund crunch. Even the airline has sued Pratt & Whitney in US federal court.
The airline’s CEO Kaushik Khona said, “It is an unfortunate decision (filing for voluntary insolvency resolution proceedings), but it had to be done to protect the company’s interests”.