Go First doing everything possible in current situation with utmost care for employees: CEO tells staff

Go First airline has filed an application for voluntary insolvency proceedings and has also cancelled all its flights for three days starting May 3

May 03, 2023 03:29 pm | Updated 04:46 pm IST - Mumbai

Go First chief Kaushik Khona.

Go First chief Kaushik Khona. | Photo Credit: Shiv Kumar Pushpakar

Go First chief Kaushik Khona has told employees that the airline has been crippled by recurring Pratt & Whitney engine troubles and assured that the carrier is doing everything possible to navigate the situation with utmost care and concern for all staff.

The no-frills carrier has filed an application for voluntary insolvency proceedings and has also cancelled all its flights for three days starting May 3.

In a message to employees late on May 2, Mr. Khona said that a terrible crisis has been created by Pratt & Whitney’s failure to supply engines.

For more than 12 months, the airline’s management has tried their level best to convince P&W to provide spare engines, repair engines. However, P&W has been stonewalling the discussions, the CEO said, adding that it 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 a further 10 spare-leased engines per month until December 2023.

“With that, the airline would have had all its A320 neo aircraft operational by August/September 2023... unfortunately, Pratt & Whitney has chosen to defy the order from the Emergency Arbitrator,” Mr. Khona said in the message.

The airline approached the arbitrator, who reinforced the order and since P&W “chose to defy for the second time”, it filed enforcement proceedings at a U.S. court seeking implementation of the order, he added.

More than half of the airline’s fleet is grounded due to engine issues.

With a depleted fleet size, Mr. Khona said the airline is not able to generate revenue for the payment of lessors, and as a result, they are taking coercive steps against the company by invoking letters of credit, grounding notices and demanding return of aircraft.

“... The company has been crippled by the recurring Pratt & Whitney engine troubles. Pratt & Whitney’s defiance in not supplying spare engines as instructed by the Emergency Arbitrator has ground your company to a halt,” he told the staff.

Against this backdrop, Mr. Khona said there was no other option other than seeking voluntary insolvency resolution proceedings to preserve the company’s operations by taking effective steps.

Addressing the employees as “Go Getters”, the CEO said, “We want to reassure you that we are doing everything possible to navigate this situation with the utmost care and concern for all employees.”

“I am hopeful 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 a further action plan, as and when we receive orders from NCLT,” he added.

Section 10 of the Insolvency and Bankruptcy Code (IBC) pertains to voluntary insolvency resolution proceedings, and applications in this regard are filed before the National Company Law Tribunal (NCLT).

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