Go First, formerly known as GoAir, has recently made headlines with the announcement that it will be canceling all its flights until 20th November due to operational reasons. This decision has raised concerns among passengers and industry observers and is indicative of the challenges that the airline has been facing in recent times.
The airline, which has been grappling with various issues, chose to suspend its operations temporarily to address these challenges. The move follows a series of operational disruptions and financial woes that have plagued Go First.
One of the primary issues contributing to this decision is financial distress. Go First has been facing financial challenges primarily stemming from problems related to the Pratt and Whitney engines used in its fleet. The airline was compelled to ground several of its aircraft due to concerns over the reliability of these engines. This not only led to a reduction in its operational capacity but also incurred substantial costs for maintenance and replacement.
To mitigate these financial issues, Go First took the path of filing for insolvency. The National Company Law Tribunal (NCLT) approved the airline’s plea for insolvency back in May, a move that effectively suspended the airline’s board and management control. However, the insolvency proceedings have yet to yield a comprehensive solution, and the airline continues to grapple with financial instability.
Additionally, the recent changes to the Insolvency and Bankruptcy Code (IBC) have introduced some complexities for the airline and its lessors. These changes, effective from 3rd October, exempt deals related to aircraft, engines, airframes, or helicopters from the moratorium on insolvency proceedings. This means that Go First’s aircraft lessors have the legal avenue to seek repossession of their assets.
While this offers a potential solution to the lessors and a path to repossess their aircraft and engines, the process may not be straightforward. Legal proceedings and negotiations with the airline could lead to delays in the repossession process, and it remains to be seen how these issues will be resolved in practice.
The decision to suspend all flights until 20th November raises concerns for the passengers who had bookings during this period. Go First has expressed its regret and has promised to assist affected passengers as they grapple with the inconvenience caused by these flight cancellations. The airline is committed to providing support to its passengers during this challenging time.
Furthermore, the airline has expressed its intention to resume operations once the current issues are resolved. Go First has filed an application for the immediate resolution and revival of its operations, which is an indication of its commitment to providing a sustainable solution and returning to normalcy.
Go First’s decision to temporarily halt its operations highlights the challenges that airlines have faced in the wake of the COVID-19 pandemic and the broader economic implications. The aviation industry has been particularly vulnerable to the impact of the pandemic, which led to a dramatic reduction in travel and passenger numbers.
As Go First navigates these issues, it remains to be seen how it will address its financial woes and regain its operational strength. Passengers and industry observers will be watching closely to see how this situation unfolds and whether Go First can emerge stronger from these challenges.
