Go First, India’s third-largest airline, cancelled all flights of 3 and 4 May, 2023 due to the cash crunch. As per the information shared by the Directorate General of Civil Aviation (DGCA) on 2 May 2023, all airline companies notified it about the sudden flight cancellation. Go First has been facing a financial crisis due to the pending supply of jet engines by Pratt and Whitney (P&W), a US-based Jet manufacturing company. Another reason behind the cash crunch with the Airline company is the uncleared dues by the oil marketing companies.
In the recently released statement, Go First mentioned, “The grounding of close to 50% of its A320neo fleet due to the serial failure of Pratt & Whitney engines, while it continued to incur 100% of its operational costs, has set GO FIRST back by ₹10,800 crore in lost revenues and additional expenses. Moreover, GO FIRST has paid ₹5,657 crores to lessors in the last two years, of which approximately ₹1,600 crores was paid towards lease rent for non-operational grounded aircraft.”
The Airline company also opted for voluntary insolvency because it had insufficient cash flow to keep the fuel running in its jet engines. On the website, passengers get a clear message that all the flights scheduled for the 3rd and 4th of May have been cancelled. In addition, it is also stated that the airline will provide full refunds to the passengers who were booked to travel on these days.
Go First also received legal notices from lessors for terminating the aircraft lease agreement. It is also seen as an opportunity for other airline companies to buy Go First market shares. However, bankruptcy and low cash flow may also result in high flight fares that directly affect the passengers’ pockets.