Recently, the famous airline company Go First, previously known as Go Air, has filed for bankruptcy protection, which is the act in which the bankrupt company only owes a limited amount to its debtors. This act was granted by the National Company Law Tribunal (NLCT) on 10th May, 2023.
Go First announced on 2nd May, 2023 that it was stopping all operations – becoming one of the largest airlines to fold in recent years. However, after their claim for bankruptcy protection was granted, Go First decided to resume flights from the 24th of May, 2023. Amid their crisis, they have decided to chalk out a full fledged business plan to resume operations with a total of 23 aircrafts.
According to published reports, 54 out of 57 of Go First’s aircrafts had a faulty engine designed by Pratt & Whitney, which caused the grounding of many of their aircrafts, leading to their claim for bankruptcy protection. However, Pratt & Whitney stated, citing legal documents, that Go First’s fall was dependent on their “own poor management skills” and events like COVID, and their claim of “faulty” engines was surprising without any substantial evidence to back it up.
Civil Aviation Minister, Jyotiraditya Scindia, stated earlier that Go First had been facing critical issues in their supply chain because of severe issues of their engines supplied by Pratt & Whitney, following which the government has been aiding the airline in every possible way.
Because of this voluntary insolvency claim issued by Go Air, the airline company raised passenger fares in a rush to decrease their cash crunch, leaving other competitors to take Go Firsts market share immediately.
Their total debt, as of 28th April, 2023 was of $798 million, which was displayed in their reports and filings for their bankruptcy protection claim. Go First is one of the first major airlines to crash and file for bankruptcy after Jet Airways, which had filed in 2019, according to reports.
