Go Airlines, also known as Go First, has urgently sought bankruptcy protection from India's company law tribunal as it faces mounting pressure from lessors seeking to repossess its planes.
The airline filed for bankruptcy protection last week, attributing the grounding of about half its 54 Airbus A320neo to "faulty" Pratt & Whitney engines. Though the National Company Law Tribunal heard the plea, it is yet to pass an order.
The delay has allowed leasing companies like SMBC Aviation Capital, Pembroke Aircraft Leasing, and GY Aviation Lease to request the aviation regulator to take back at least 20 planes. Lawyers representing Go Airlines warned that the lessors' actions could have a further impact on its operations.
Meanwhile, India's aviation regulator has instructed Go Airlines to stop issuing new tickets. Pratt & Whitney, the exclusive engine supplier to the airline, has previously dismissed the claim of faulty engines and blamed the carrier's "poor management" and the impact of Covid-19 for its downfall.
As of April 28, Go First's total debt to financial creditors was $798 million, according to its bankruptcy filing with the tribunal. This marks the first major airline collapse in India since Jet Airways declared bankruptcy in 2019.
Go Airlines had initially blamed the grounding of its fleet on the "technical glitches" of Pratt & Whitney engines. However, the engine manufacturer dismissed the allegation as baseless and said that Go Airlines' poor management and the pandemic were the primary reasons for its failure.
The mounting pressure on Go Airlines from lessors and regulators has put the airline in a precarious position. The company's lawyers have urged the tribunal to grant its request for bankruptcy protection immediately to prevent further damage to its operations.
If the tribunal grants the airline's request, it will be able to undergo restructuring, reduce its debt burden, and make a fresh start. However, if the tribunal rejects the request, the airline may have to shut down its operations permanently, leading to job losses and significant financial losses for its creditors.
In conclusion, the future of Go Airlines remains uncertain as it faces mounting pressure from all sides. The airline's fate now rests on the decision of the company law tribunal.