New Delhi: Go First on Tuesday announced suspension of its flights for May 3 and 4 as due to poor cash flow. In the absence of liquidity, the airline company is unable to clear dues it owed to oil marketing companies.
“Go First to temporarily suspend flights on May 3, 4 due to severe fund crunch,” said Go First chief executive officer (CEO) Kaushik Khona on Tuesday.
The airline has filed an application for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT). It is facing financial crunch due to non-supply of engines by P&W that has forced grounding of 28 planes, Khona told the newspersons.
The airline’s cash flow has been seriously hit as it has grounded over half of its fleet due to issues with Pratt & Whitney engines.
After the crisis, the Wadia-group owned airline is also eyeing for a strategic investor in the company and has been in talks with several investors. Meanwhile, the airline had earlier denied reports that Wadia group, which owns the ultra-low-cost carrier, has sought to sell stake in the company in order to exit the aviation business.
Go First recently posted its biggest annual loss in fiscal 2022 and has been facing operational problems in the last few months as half of its aircraft were grounded due to supply chain disruptions related to P&W jet engines.
Go First has been running daily operations with 28 aircraft out of the airline’s fleet of 57, with the remaining aircraft grounded due to trouble with engines supplied by American manufacturer Pratt & Whitney. Once the NCLT admits the application, then the flights will be restarted, Khona said. Go First has more than 5,000 employees.
DGCA issues show-cause notice to airlines
The aviation regulator of the country issued a show cause notice to Go First after the airline canceled fresh bookings from 3-4 May. Go First officials said that they would sent a detailed report regarding the status of the airline and its decision to stop flight operations.