BENGALURU, May 3 (Reuters) – Go Airlines (India) said on Wednesday it had no plans to exit the cash-strapped Indian carrier, a day after filing for bankruptcy, with Pratt & Whitney engines landing half of its planes. Its fleet.
“The Wadia Group, especially Nusli Wadia, has always tried to see that the company and airline operations continue on a normal basis even though we have been completely crippled by Pratt & Whitney,” said CEO Kaushik Kona. “Wadia has no intention of leaving or leaving the group.”
India’s third-largest airline said in its bankruptcy filing that it was recently renamed GoFirst after the US company refused to comply with an attribution order to release spare leased engines. Full functions.
Go First argued in the arbitration that Pratt & Whitney engines had a “serious design defect” that caused engine shutdowns and premature failures, and that it led to 510 engine removals and 289 engine replacements between 2017 and 2023. As of this week, 28 of its flights have been grounded.
Pratt & Whitney said in the arbitration award that Go First’s arguments relied on “constructive obligations.”
Pratt said Go First could not be shown to be “the sole or exclusive cause – or any cause” – of its poor financial situation.
GoFirst is the first Indian airline since Jet Airways in 2019 to highlight tough competition in the sector led by IndiGo and Air India.
The bankruptcy proceedings were aimed at reviving the airline and not selling it, Kona told Reuters, confirming that Pratt & Whitney had made all required payments.
Go First, which had a nearly 10% share of the Indian market in winter 2021, has declined to 7% in October 2022. By March, its weekly departures were down 39% from 2021 to 1,390.
On Wednesday, the airline’s CEO said the tenants would block the move and confirmed that some parties had expressed interest in taking a stake in the airline.
“The Indian government is very keen that we don’t fail,” Kona said.
Go First’s creditors will likely meet on Wednesday to discuss what to do next after the bankruptcy filing on Tuesday, two bankers familiar with the development told Reuters.
The airline owes financial creditors 65.21 billion Indian rupees ($797 million), its bankruptcy filing shows. As of April 30, GoFirst had not repaid any of those loans, it said in a filing seen by Reuters.
An Indian court is expected to take up CoFirst’s bankruptcy case on May 4, a lawyer familiar with the matter told Reuters on condition of anonymity.
Go First’s bankruptcy could be a boon to its competitors.
“If the suspension persists, other airlines adding capacity will try to use the seats vacated by Go First to gain market share,” Jefferies analyst Prateek Kumar said in a client note.
Central Bank of India
($1 = 81.8450 INR)
Chris Thomas reports in Bangalore; Editing by Tanya Ann Thobill
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