Chennai: The American engine supplier company, Pratt & Whitney (P&W), on Wednesday reacted to the Go First’s allegations of delaying the engine supply to the Indian budget airline and said the Wadia group had a lengthy history of missing its financial obligations to P&W.
The P&W spokesperson, however, declined to elaborate the issue.
“Pratt & Whitney is committed to the success of our airline customers, and we continue to prioritize delivery schedules for all customers. P&W is complying with the March 2023 arbitration ruling related to Go First. As this is now a matter of litigation, we will not comment further,” the company spokesperson said.
Go Airlines, which had announced suspension of flight operation for the next couple of days (May3-4), has said that it has been forced to apply to the National Company Law Tribunal (NCLT) for voluntary bankruptcy after P&W, the exclusive engine supplier for its Airbus A320neo aircraft fleet, refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC).
“That order directed P&W to take all the reasonable steps to release and dispatch without delay to Go First at least 10 serviceable spare leased engines by April 27, 2023 and a further 10 spare leased engines per month until December 2023, with the objective of Go First returning to full operations and achieving its financial rehabilitation and survival,” the airline said on Tuesday.
Had P&W complied with the arbitration award, the Go First would be able to resume full operations of its flights by August/September 2023, the airline official said.
“Despite the emergency arbitrator’s order, however, at the date of this press release, P&W has failed to provide any further serviceable spare leased engines at all, and has stated that there are no further spare leased engines available for it to comply with the emergency arbitrator’s award,” Go Airlines had said.
The airline has filed a case in a US court against Pratt & Whitney to comply with the arbitration award. The airline said it has resorted to approaching NCLT despite the infusion of ₹3,200 crore by the promoters into the airline in the last three years, of which ₹2,400 crore was injected in the last 24 months, and ₹290 crore in April 2023 alone. Thus, the total promoter investment in the airline since its inception is approximately ₹6,500 crore.
Meanwhile, the airline company said that it has also received significant support from the Government of India’s emergency credit line guarantee scheme. The grounding of close to 50% of its A320neo fleet due to the serial failure of P&W engines, while it continued to incur 100% of its operational costs, has set the airline by ₹10,800 crore in lost revenues and additional expenses.
The petition filed in the NCLT suggest that the airline has paid ₹5,657 crore to the lessors in the last two years of which approximately ₹1,600 crore was paid towards lease rent for non-operational grounded aircraft from the funds infused by the promoters and the Government of India’s emergency credit line guarantee scheme. In order to recover these (and other) losses, Go Airlines sought compensation of ₹8,000 crore in the SIAC arbitration.
An email sent to the airline to seek its comments on the P&W’s allegation that it missed financial obligations remained non-replied.