Go First Airways Files For Insolvency, Blames Pratt & Whitney Engines

"...in the absence of Pratt & Whitney not providing the required number of spare leased engines in accordance with the order issued by the emergency arbitrator, Go First is no longer in a position to continue to meet its financial obligations," the airline said.

The lenders met Go First's management a few weeks ago, but no intimation was given, said one of the bankers. Lenders will meet shortly to assess the situation and decide on the future course of action, they said.

The number of grounded aircraft due to the engine issue increased from 7% of its fleet in December 2019 to 31% in December 2020 and 50% in December 2022, the airline said.

The groundings cost Go First Rs 10,800 crore ($1.32 billion) in lost revenues and additional expenses, it said.

The grounded flights resulted in Go First's market share falling to 6.9% in March from 8.4% in January, latest data from the Indian aviation regulator showed.

"I am a little stunned to hear of them file for bankruptcy and proceed for IBC," said Mark Martin, CEO at aviation consultancy Martin Consulting LLC. "I still feel that this might not be the end of GO First. This must be a vehicle and a means for somebody new to take over."

Martin blamed 80% of Go First’s financial woes on Pratt & Whitney and said it was not a case of mismanagement by promoters.

The airline was seeking to raise funds and Indian conglomerate Wadia Group was reported to be in talks to either sell a majority stake or completely exit its shareholding.

"The additional consequence of Pratt & Whitney's actions has also driven some lessors to repossess aircraft, draw down letters of credit and notify further withdrawal of aircraft," the airline said.