Get News First: GoFirst chief Kaushik Khona has told employees that the airline has been crippled by a recurrence of Pratt & Whitney engine problems and assured that the carrier is doing everything possible to navigate the situation with utmost care and concern for all employees. is trying
The no-frills carrier has filed an application for voluntary insolvency proceedings and has also canceled all its flights for three days from Wednesday (May 3). In a message to employees late on Tuesday (May 2), Khona said the failure of Pratt & Whitney to supply engines had led to a dire crisis.
For more than 12 months, the airline’s management tried their level best to persuade P&W to provide spare engines, repair engines. However, P&W is stalling the discussions, the CEO said, adding that it has moved emergency arbitration in Singapore.
According to the airline, the arbitrator ordered P&W to supply at least 10 serviceable spare leased engines by April 27 and 10 spare leased engines per month till December 2023.
Kaushik Lose’s message to staff members:
“With this, the airline will have all its A320neo aircraft in operation by August/September 2023. Unfortunately, Pratt & Whitney has chosen to disregard the emergency arbitrator’s order,” Khona said in the message.
The airline approached the arbitrator, who strengthened the order and since P&W “chose to defy for the second time”, it filed enforcement proceedings in a US court seeking implementation of the order, he said. More than half of the airline’s fleet has been grounded due to engine problems.
Khona said that with the dwindling fleet size, the airline has not been able to generate revenue to pay the lessors, and as a result, they are taking drastic measures against the company by demanding letters of credit, grounding notices and return of aircraft . The company was crippled by recurring problems with Pratt & Whitney engines. Pratt & Whitney’s defiance in not supplying additional engines as directed by the Emergency Arbitrator has restrained your company,” he told the employees.
Against this backdrop, Khona said that there was no other option but to seek voluntary insolvency resolution proceedings to preserve the operations of the company by taking effective steps. Addressing the employees as “go getters”, the CEO said, “We want to assure you that we are doing everything possible to deal with this situation with utmost care and concern for all employees.”
“I hope that once the application under Section 10 of IBC for interim relief is considered, we will be in a better position to update you with the further course of action on receipt of the order from NCLT,” he said.
Section 10 of the Insolvency and Bankruptcy Code (IBC) deals with voluntary insolvency resolution proceedings and applications in this regard are filed before the National Company Law Tribunal (NCLT).
(With PTI inputs)
Read also: Two GoFirst flights diverted, landed at Surat airport
Read also: GoFirst Airlines says all its flights will remain canceled from May 3-5. Details